Transcription of Tax treatment of dividend income - Wells Fargo Advisors
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Tax treatment of dividend income - Wells Fargo Advisors
1 of 3 tax treatment of dividend incomeThe special qualified dividend treatment can increase your after-tax returnInvestors find dividend -paying stocks and mutual funds attractive because their total return includes both the dividend and any market price appreciation. Adding to the appeal of some dividends is the special tax treatment they receive. Taxpayers whose income exceeds certain thresholds should be aware of the additional Medicare surcharge on excess investment tax purposes, dividends are considered either qualified or nonqualified. Qualified dividends and nonqualified dividends are taxed as follows:Qualified dividends tax ratesQualified dividends are taxed at the long-term capital gain rates as per the following table. Nonqualified dividends are taxed at ordinary income tax Long-term capital gain ratesFiling filing jointly and surviving spouse$0 $83,350$83,351 $517,200 Over $517,200 Single$0 $41,675$41,676 $459,750 Over $459,750 See example on page 2 for application of the above filing as single or head of household with Modified Adjusted Gross income (MAGI) of $200,000 and married taxpayers fili
Tax treatment of dividend income The special qualified dividend treatment can increase your after-tax return. Investors find dividend-paying stocks and mutual funds attractive because their total return includes both the dividend and any market price appreciation. Adding to the appeal of some dividends is the special tax treatment they receive.
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