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Larry Dighera wrote:
Here's a quote from an unbiased source: http://www.smartmoney.com/taxmatters...story=20030527 Qualified Dividends Now Taxed at 15% or Less As you know, dividends have always been taxed as "ordinary income." That meant you paid your regular tax rate, which could be as high as 35% (formerly 38.6%). That was then. Effective for all of 2003 through the end of 2008, qualified dividends from domestic corporations and qualified foreign corporations will be taxed at the same low rates as long-term capital gains. And those rates have been reduced, too (see below). Bottom line: The maximum rate on qualified dividends is now only 15%. And if you're in the 10% or 15% rate bracket (see the table above), your dividends will be taxed at only 5%. (For 2008, the rate will be 0%, but just for that one year.) ... As they should be because they are an investment that funds the rest of the economy. One more thing: The new low rates don't apply to dividends received in tax-deferred retirement accounts (traditional IRAs, 401(k) accounts, SEP and Keogh accounts, and the like). Dividends accumulated in these accounts will still be taxed at your regular rate (up to 35%) when withdrawn as cash distributions. Up to 35% if you are still earning at the top tax bracket. |
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