Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124941  
Subject: Re: New account - strategy for taxes? Date: 4/17/2013 10:39 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
I am wanting to collect growing dividends to use as income for myself when needed, reinvest the collected income if I don't need it.
Those who are already investing to collect a monthly or quarterly income, how do you handle the dividends?

It really depends on what you think your potential income needs from the dividends is going to be.

I have an account that I am using to generate income for a specific payment, so I don't reinvest those dividends - they go straight to a checking account at the broker where I hold the investments, and the payment is made from that account.

If I was not sure that I was going to need the income and wanted to reinvest at least some, I would probably determine what I thought my maximum potential income need from the dividends would be, collect that amount of dividends in the checking account, and then start reinvesting. I would look to re-load the checking account on a regular basis by stopping the reinvestment if I was using the money, otherwise I would just keep reinvesting.

Another way to split between cash and reinvestment would be to collect dividends from specific investments in the checking account and reinvest dividends from the rest of the investments, adjusting if the checking account was getting too big or too small, or as dividend payments changed.

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.