How are dividends taxed? Are they all taxed the same?
That really depends on the dividends that you are talking about. The annual 1099-DIV form that your company will send you shows how much you received in dividend payments, even if it all went to buy more stock. Report all dividends as income on your annual tax return. The dividends are treated as ordinary income and will be taxed at your marginal tax rate. Pretty simple. It’s much like reporting interest from a savings account — a one line entry. You report the dividends you receive on Schedule B, which is used to record interest and dividend income, but only if you receive more than $400 worth in one year. Otherwise, you simply report dividend income on your main 1040 tax form. Sometimes capital gains can appear where you least expect them, like on a dividend statement related to a stock or mutual fund that you own. It’s good to look closely at the 1099-DIV forms you receive to see if they say anything like “Capital Gains Distribution” on them. Most stock dividends are treated as nor
