# Taxable or tax-advantaged: where payouts get taxed > See how the same fund payout is taxed in a regular account versus an IRA or 401(k), using two real income ETFs' annual-report tax splits. Data as of Nov 10, 2026. Rebuilt every trading night. ## Taxable or tax-advantaged: where payouts get taxed Data as of Nov 10, 2026. Rebuilt every trading night. On $10,000 over the year to Nov 10, 2026 , JEPI paid $805 and SPYI $1,196 , yet SPYI's fiscal year to Dec 31, 2025 was 95.3% return of capital. Building Wealth · Lesson 4 of 6 1 2 3 4 5 6 Pick an amount. See each fund's cash and the tax it would add in a taxable account. Amount you put in $10,000 On $10,000: JEPI cash paid $805, JEPI tax, taxable account $177, SPYI cash paid $1,196, SPYI tax, taxable account $12. Hypothetical amount and a hypothetical 22% rate on ordinary income. One-year cash to Nov 10, 2026; split by each fund's latest annual report. ### The question "I have a regular brokerage account and a retirement account. Does it matter which one holds which fund?" ### The idea - The account a fund sits in decides when its payouts are taxed, and how. - Taxable account (a regular brokerage account): payouts are taxed in the year they're paid, even if reinvested ( Taxes in plain words ). The kind of payout matters every year: ordinary income at your wage rate, long-term gains usually lower, return of capital later. - Tax-advantaged account : an account the tax law shelters, such as an IRA or a 401(k). Payouts inside it aren't taxed in the year they're paid. In a traditional account, money is taxed as ordinary income when you take it out. In a Roth account, withdrawals that meet its rules aren't taxed at all. - So in a taxable account, a fund's tax split (how its payouts divide into income, gains and return of capital) lands on you each year. In a tax-advantaged account, it doesn't change that year's bill. ### Worked example Two income funds holding S&P 500 stocks with option income: - JEPI earns it through notes: contracts with banks that pay like options on the S&P 500. - SPYI writes options on the S&P 500 index itself. Payouts cover the year to Nov 10, 2026 . The split comes from each fund's latest annual report, for an earlier fund year: JEPI's to Jun 30, 2026 , SPYI's to Dec 31, 2025 . Applying it to this year's cash is an estimate. Step 1. Cash paid on $10,000 : - JEPI: 8.0% = $805 - SPYI: 12.0% = $1,196 Step 2. The annual reports' split: - JEPI: 100% ordinary income. All $805 . - SPYI: 4.7% ordinary income and 95.3% return of capital. So $57 ordinary income and $1,139 return of capital. Step 3. In a taxable account, at a hypothetical 22% rate on ordinary income: - JEPI: $805 × 22% = about $177 of tax this year. - SPYI: $57 × 22% = about $12 this year. The $1,139 lowers your cost basis (what you're counted as having paid), so it is taxed when you sell. Step 4. In a tax-advantaged account: $0 this year for both. When money leaves, the account's own rule applies, not the fund's split. These are the funds' facts, not tax advice. ### The common mistake "It writes index options, so its payouts are tax-light." Index options fall under Section 1256 , a tax rule that treats the fund's gains on them as 60% long-term and 40% short-term, however long it held them. But that is one input, not the result. XYLD also writes S&P 500 index options. Its annual report for the year to Oct 31, 2025 split its payouts 87.4% ordinary income, 10.1% long-term gains and 2.5% return of capital. Same kind of option, a very different split. Read the annual report. ### Check your understanding Pick an answer to see why. Two of three right passes the lesson. 1. A fund in a traditional IRA pays $500 this year. How is it taxed this year? A As ordinary income B It isn't taxed this year C As a long-term gain D Half now, half later Answer: B. It isn't taxed this year. payouts inside a tax-advantaged account aren't taxed when paid. Not A: ordinary income tax applies when money comes out of a traditional account, not when the fund pays. 2. In a taxable account, a fund pays you $2,000, all ordinary income. At a hypothetical 22% rate, what is this year's tax on it? A $0 B $220 C $2,000 D $440 Answer: D. $440. $2,000 × 22% = $440. Not A: that would be true inside an IRA, not in a taxable account. 3. Funds P and Q both write options on the S&P 500 index. What does that tell you about their payouts' tax split? A Not enough: read each fund's annual report B Both are mostly return of capital C They match D Both are all ordinary income Answer: A. Not enough: read each fund's annual report. XYLD and SPYI both write those options, and their latest reports split their payouts very differently. Not C: the option type is one input, not the answer. ### Takeaways - In a taxable account, the kind of payout decides this year's tax. In an IRA or 401(k), it doesn't. - Read the fund's tax split from its annual report, not from its strategy. - Open a fund's tax block on ETFIQ to see its split and the options it writes. ### Do it on ETFIQ See how your fund's payouts split for tax Your fund ### Where to next --- Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices. Cite: ETFIQ, Taxable or tax-advantaged: where payouts get taxed, data as of Nov 10, 2026. https://etfiq.com/academy/building-wealth/taxable-vs-tax-advantaged/ Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms. HTML: https://etfiq.com/academy/building-wealth/taxable-vs-tax-advantaged/