Update: 2007 Passive Income

When I posted our total passive income in 2007 in the middle of the month, one item missing from the calculation was interests earned from our purchases of 4-week T-bills in the first half of the year. Though I can go through all the transactions and figure out myself how much I have made, it would be very time consuming. So I instead decided to wait for the 1099.

Yesterday, the tax form arrived and it shows in 2007 we earned $441.45 in interests from investing in 4-week T-bills. That puts our total passive income last year at $18,245.80.

Sure, the money is good, but we will certainly take a hit at tax time. The *good* news is most of the distributions qualify a lower, 15% tax rate as they are either qualified dividends, or long term capital gains. From my rough estimate, we will have to pay about $3,500 extra taxes for all the passive incomes in 2007.

I don’t mind paying taxes because that means I have made money. Giving the money I earned back, however, is a totally different feeling.