How much tax will I pay if I cash out my annuity?

Moving up the ladder, the second tax bracket imposes a 12% tax rate on taxable income ranging from $11,601 to $47,150. This bracket accommodates a wider range of investors, recognizing the increasing complexity and value of their portfolios.

For those with substantial investments, the third tax bracket applies a 22% rate to taxable income between $47,151 and $100,525. This bracket reflects the need for a higher tax contribution from investors with larger portfolios, contributing to the overall tax base.

As taxable income surpasses $100,525, the fourth tax bracket comes into play, imposing a 24% tax rate on amounts ranging from $100,526 to $191,950. This bracket ensures that the most affluent investors contribute proportionately more to the tax system.

Taxation on cryptocurrency withdrawals is a crucial aspect for investors to consider, as these amounts are typically treated as ordinary income for taxation purposes. Understanding the tax brackets and rates applicable to your withdrawals is essential for financial planning.

The first tax bracket for cryptocurrency withdrawals is 10%, which applies to taxable income up to $11,600. This bracket caters to individuals with modest investment portfolios, ensuring a fair and manageable tax liability.