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Qualified dividends are taxed at a different rate than your regular, earned income or income from interest payments. In and of themselves, regular dividends and qualified dividends are similar.
If you receive qualified dividend income, the capital gains tax rate is 20 percent, 15 percent or 0 percent depending on your income. ... Dividends must meet these criteria to be considered ...
From 2003 to 2007, qualified dividends were taxed at 15% or 5% depending on the individual's ordinary income tax bracket, and from 2008 to 2012, the tax rate on qualified dividends was reduced to 0% for taxpayers in the 10% and 15% ordinary income tax brackets, and starting in 2013 the rates on qualified dividends are 0%, 15% and 20%. The 20% ...
If the dividends meet the definition for qualified, then the investor would owe no more than 20% tax on the income. That top rate only applies to high-income filers whose marginal tax rate is the ...
Qualified dividends: These are dividends that are taxed at the capital gains tax rate (which is lower than the standard income tax rate). For a dividend to be considered a qualified payout, it ...
Another case where income is not taxed as ordinary income is the case of qualified dividends. The general rule taxes dividends as ordinary income. A change allowing use of the same tax rates as is used for long term capital gains rates for qualified dividends was made with the Jobs and Growth Tax Relief Reconciliation Act of 2003. [1]
Whatever your income tax bracket, that's the rate you pay on ordinary dividends. One way to remember the major distinction here is that "ordinary dividends" are taxed at ordinary income tax rates.
Earning dividends is a valuable source of income for investors, particularly those saving for retirement. The IRS allows qualified dividends to be taxed at a lower capital gains rate than the ...