No. of Recommendations: 19
If you own any dividend paying stocks, you might be in store for a year end surprise. Jason Zweig in the Wall Street Journal reports that some companies will likely pull their ex-dividend dates into 2012.[1] Investors might receive unplanned income that impacts their 2012 tax. This is dependent on how Congress deals with the fiscal cliff issues before year end. Recall that if NOTHING is done, dividend tax rates will rise in the worst case from 15% up to 43.4%. Obviously, the rates will be different for each taxpayer.

Jason also raises a good point if you own a private corporation. Many private corporations pay a large percentage of their profits out as dividends as opposed to taxable income. IF you have a private corporation, you might consider pulling a portion of the 2013 dividend into 2012.

Clearly I have NO divine knowledge as to how/when the fiscal cliff issues will be resolved, so each investor will have to make their own assessment.



[1] Wall Street Journal article “Dividends: Start Screaming”
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