Ordinary Income
Categories: Tax, Accounting, Retirement
Ordinary income refers to the tax rate you get charged for your earnings and for investment gains on investments you've held for less than a year.
The tax rate for ordinary income is way higher (like almost twice as much) than it is for capital gains (profits you've gotten on investments you've held for a short period of time).
Moral of the story: Hold on to your investments for more than a year, or the government will consider it ordinary income and take more of it from you.