A result of tax changes enacted in 2003, tax rates on dividends and capital gains were cut to a flat 15% for all investors. Now, the Obama administration and congressional Democrats want to see both rates rise to 20% for married couples earning more than $250,000 per year. However, if partisan gridlock prevents these new rules from getting passed, pre-2001 bracket rates would come into effect by default boosting the tax rate on dividends to just shy of 40% for all investors regardless of their income levels. Given the current state of turmoil on The Hill these days, it's increasingly likely that such a scenario could come about.
Source: Investopedia
Related Articles:
Dividend Stocks' Tax Rate Could Increase to 39.6%
Posted by D4L | Saturday, April 10, 2010 | ArticleLinks | 1 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Dividend Growth Stocks News
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
There are two huge errors in this article:
First, the rate on dividends was NOT a flat 39.6% prior to 2001. Nonsense! Dividends were taxed at the same rate as regular income. If the current law expires, that's what we would revert back to.
Second, the current rate on dividends is NOT a flat 15%. It is 0% on the portion of your income that is in the 10 and 15% bracket. Once your income reaches the 25% (or higher) bracket, THEN dividends are taxed at a marginal rate of 15%.
The rule for long-term capital gains is the same as for qualified dividends.