Dividend Taxes Explained [United States 2021]

Today, I’m going to explain how dividends are taxed in the United States. As a dividend investor, understanding the tax implications of this strategy is very important. A qualified dividend is taxed at the long-term capital gains tax rate, which is lower than the regular income tax rate. Nonqualified dividends, often referred to as ordinary dividends, are taxed at the higher regular income tax rate. I discuss the 2021 dividend tax rates for single and joint filers. Finally, I share how a ROTH IRA can help shield dividends from taxes.

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Disclaimer: This is my opinion and not to be considered financial advice

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[FinancialShinanigan]

My 0.22% dividend yielding portfolio appreciates this info!

[JayPMC]

Thank you so much for making this video! It’s extremely helpful and well made.

[apenzijncool]

How come we never see an intro anymore? It made me feel like the best investor in the world...

[MrDixa]

Thank you for explaining taxes on dividends :) keep up the great work!

[alexruchti]

Just to be clear, when moving from the 0-15% tax bracket or any tax bracket only the money you make after 40k is taxed at 15% so your first 40k will still be taxed at 0%. Same principal works for income from 10-12%

[pgwg]

Thank you. I watch all of these videos and it is nice to see the tax implications discussed as well. I have too many unqualified dividends right now (REITS, company stock options). I am working towards balancing it out a little better

[TresaCrossfitjourney]

I'm working on my 2nd MBA this one is Accounting and Finance with an emphasis on CPA studies. I'm taking Federal Taxation and after reading 8 Chapters this one video explained dividends better!!! Thank you so much, I'm a dual learner with visual on the higher curve. 😂❤

[MajinJoRaffe]

Roth IRA is what I’ve been doing for my dividend portfolio (as of 2020 the only catch is the limitation on how much you can contribute). I’m also buying the same dividends on my brokerage account

[TheNORegretShow]

It doesn't matter how much money you make. You can do something called a Backdoor Roth IRA conversion. First you add the money to a Traditional IRA then convert to Roth IRA. Then your account files a 8606 form. 100% legal.

[tyfighter]

Good info. on dividend income and taxes. Now I'm planning on having nothing but dividend paying stocks in the Roth.

[SpeakerBuilder]

You may have covered this, but all stock payments are included in their total on your tax form as part of your adjusted gross income, and then by completing the Capital Gains and Qualified Dividends worksheet, your capital gains and qualified dividends are separated from the AGI figure and taxed at 15% (for me), and the rest is taxed as regular income according to the tax table, then you add those two figures to get your total tax obligation. Just one more form to complete but it's not that hard.

[zjg]

Short, full of info, concise. Awesome stuff!

[ZerCraftGaming]

How does this work for etfs like SCHD? Are All stocks in this etf considered "qualified" and are any exempt?

[christhjian]

Really great content, but what about investors from other countries - are they being taxed the same way as American citizens? I'm doing some research to start investing and I'm really interested in American market too. But I want to learn all the aspects about taxing beforehand.

[soundreamerbg]

As a non-US citizen I get double taxed. Once in the US and once in my home country. The US tax is according to the international agreement with the country of tax residence. In my case that is 10% in the US and 10% locally.

[Tslee]

I like your videos man thanks! Keep up the good work

[khongcolong]

Excellent content! Thanks for sharing. Hope you can answer this question. I will take your answer to this question as entertainment and NOT tax advice. So As a single filer, and If my AGI is $40K [12% tax bracket] and long term dividend is $50K, do i pay tax on the $50K?

[ScottiMac]

Zach don't forget the tax advantages of an HSA, too

[nekonationjapan]

Always great information. I like the good breakdown.🐱

[jessieeubanks]

Love your videos. Love your intro music. Enjoyed the video sad no sweet intro music