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Knowing the Tax Differences Between Active and Passive Income

September 5, 2019

Earning a steady income is a necessity if you have plans to support yourself and often requires trading your time for money. However, not all income comes in the form of paycheck. Rather, some income comes from investments you’ve made and do not require your active effort to earn it.

This latter type of income, called passive income, can hold many advantages to active income. In fact, many investors seek these income streams as a means to supplement their ordinary income and offset their costs of living. Doing so can also present a great opportunity to stiff Uncle Sam and not fork over quite as much money each year in taxes.

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