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Originally Posted by kepp
So for a 401k, the contributions are pre-tax, but you get taxed when you take distributions...and for a Roth IRA, the contributions are post-tax but you are not taxed on the growth at all as long as you take qualified distributions?
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Yes, that is correct. To differentiate between the two, the first type is typically called a "traditional" IRA versus the Roth IRA.
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What about an ordinary trading account? Obviously the contributions are post-tax. Do you get taxed on the growth every year?
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An ordinary brokerage account will generate (1) capital gains on sales of stock or mutual funds or whatever, if any are sold, and (2) dividend income.
Capital gains can either be long term or short term. Long term capital gains are gains on securities sold after you've held hte stock for at least one year. They are typically taxed at 15%, but very high earners can see a rate of 20% on cap gains I believe. Short term capital gains are gains on securities held for one year or less, and are taxed at ordinary income.
Your ordinary income tax rate will very typically be higher than the capital gain rate. Go here to see what the highest marginal rate looks like under various scenarios.
https://taxfoundation.org/2017-tax-brackets/
(note: 2017 income tax rates subject to change based on changes in law by the new Congress/Administration, so YMMV).
Dividends also come in two flavors, qualified and not qualified. Most dividends are qualified, and are taxed at capital gains rates. Non-qualified dividends are taxed at ordinary income rates.