Learn what qualified dividends are, how they differ from ordinary dividends, and how you can (legally) pay less of your dividend income to the government.

If your dividends are qualified dividends they will be taxed at the long-term capital gains tax rate of either 0%, 15%, or 20%, depending on your income tax bracket.

The concept of qualified dividends began with the 2003 tax cuts signed into law by then-President George W. Bush. Previously, all dividends were taxed at the taxpayer's normal marginal rate.

The tax efficiency of qualified dividends stems from a lower tax rate. Typically, the rate applied to these dividends is 0%, 15%, or 20%, depending on the investor’s taxable income and filing ...

Had these dividends not been qualified, the investor would have paid $3,500 in taxes, but because they are qualified, they only owe $1,500. This results in a $2,000 tax savings, significantly ...

Qualified dividends are taxed at capital gains rates rather than ordinary income-tax rates, which are higher for most taxpayers. If the payment is not classified as a qualified dividend, it is a ...

Section 199A dividends are distributions from the profits of domestic real estate investment trusts (REITs) that qualify for a special 20% tax deduction. Investing in Section 199A dividends can ...

Understand Tax Liability on Dividend Income. Every investor must understand their tax liability on dividend income, Yen explained. “For example, qualified dividends are taxed at lower capital ...

In 2024, ordinary dividends—those that do not meet the criteria for qualified dividends—are taxed at the same rates as ordinary income, which range from 10% to 37%, depending on your taxable ...

The qualified dividend tax rate for tax year 2024 — filing in 2025– is either 0%, 15% or 20%. These rates are influenced by your tax bracket, ...