| Tax brackets: Ordinary or Short-term capital tax rates* | Tax brackets: Long-term capital tax rates* | Estimated annual reduction in tax drag | Estimated annual reduction in tax drag |
|---|---|---|---|
| 40.80% | 23.80% | 0.41% | $8,200 |
| 38.80% | 23.80% | 0.39% | $7,800 |
| 35.80% | 18.80% | 0.34% | $6,800 |
| 24% | 15% | 0.16% | $3,200 |
| 22% | 15% | 0.14% | $2,800 |
Disclosure Title
Source
Disclosure
Schwab Center for Financial Research. Assumes a portfolio with 50% of the assets in a taxable account and 50% in a tax advantaged account. Calculated by allocating the most tax-efficient assets in taxable account and the least tax-efficient assets in tax-advantaged account, based on Schwab's capital market expectations for future asset returns. Conservative portfolio assumes a target allocation of 22% cash, 62% bonds and 16% equities. The example is hypothetical and provided for illustrative purposes only and is not intended to represent a specific investment product or outcome. *Does not include state taxes. Some tax brackets include the 3.8% net investment income tax.