Are state and federal taxes automatically taken out of your stock earnings or do you have to pay all the money during tax season?

You pay taxes on your capital and interest earnings from the stocks and bonds you hold and/or sell. And the interest you earn and the capital profits you make are itemized in forms 1099, which you receive at the end of each tax year.

To earn a "comfortable living" from investments, you need close to $2 million in stocks and bonds. We assume a 5% return on investment (ROI) per annum. That would give you $200,000 per year before taxes. Which at a nominal tax rate of roughly 40% would give you $120,000 per year for your comfortable living.

There is no guarantee for ROI of course. So you could earn far less...but maybe even more.

You pay it yourself.You might have to make estimated payments.