Tax Tip Tuesday | Passive Income

*this is a transcript taken from our weekly Tax Tip Tuesday videos on Youtube.  You can watch it here.

Hey everyone. Welcome to another Tax Tip Tuesday. My name is Alexis Gallati with Cerebral Tax Advisors, and today we’re going to talk about passive income. Well, basically I’m just going to explain what exactly passive income is. And it’s pretty simple.

It’s not active income, which is income that you’re actively earning, like your W-2 wage, or me going and doing tax work, or you doing your work as a physician. It is going and earning income when you are not materially participating in it.

So things like real estate, or if you have, like affiliate marketing. Those sort of things. Now you can also do things like selling informational products, peer-to-peer lending, dividend stocks, savings accounts, rates… I mean there’s a whole bunch of different things.

By doing this though, it’s treated differently than your earned income, tax wise. And so it’s very important to know what sort of… the way that you earn your money, and how you earn it, and how it’s classified. So then that way, you’re properly making sure that you’re taxing it the correct way.

So if you have any questions, please let me know. And please follow us on Facebook, LinkedIn, Twitter, and also our blog, and of course, our YouTube channel. If you have any questions about this podcast… this video or any other videos, then please feel free to reach out. Have a great day. Thanks. Bye.