...Dividends are so low nowadays that the tax exemption isn't going todramatically help many individuals, particularly since so many people own stock in tax-deferred devices like IRA's and 401-K's (more on this later...) I disagree. In 2000, (the most recent year for which data are published) there was $142billion of dividend income reported on 34 million individual income tax returns. That averages out to $4000/return or a probable savings of more than $1000 for someone in the 27% tax bracket. If you consider all returns, there were 129 million returns or about $1100 of dividend income per return. This is not a small number. ...Currently, what you withdraw from a IRA/401K is taxed as ordinaryincome, unless it is from a Roth, in which case it is tax-exempt. Whatabout dividends from a stock in a 401K? Is this going to be taxed as ordinary income as well? In other words, it may now be advantageous toown dividend-yielding stocks _outside_ of an IRA/401K if dividends aren't taxed. ...So what? Tax laws change and investment strategies change to keep pace with the changes. It's a recurrent theme. Now IRAs will be used for shorter term investments. It's possible that some people may discover that they will do better keeping their retirement assets out of tax-sheltered vehicles.Ira
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra