Discussion Starter · #981 ·
Form 1099 DIVDo you guys pay taxes from the gains on the interest?
I wish I was excited but I'm not really, right now I have 4.75% till March 1st, when I get my statement at the beginning of the month I find it cool until I remember a second later over half goes to taxes. After March it drops to less than 1% so I have to switch account and the interests at the other place is 3%.(minus half which is 1.5%)
The GIC's are around 5.85% for 18 months but it's like money going to jail behind bars.
All dividends are taxed, unless your annual income falls below certain levels.
The US government implemented dividend tax codes, to help retirees keep their money in the stock market and build a nest egg. They did this by eliminating taxes on dividend returns if your income is below certain levels. The Obama admin tried to eliminate this structure. Not too sure what the state of it is.
There is also another instrument… DRIP. Dividend Reinvestment Plan. That’s where your dividend automatically gets used to purchase more shares. That process also reduces taxes.