Dividend Tax Calculator
Calculate federal taxes on qualified dividends versus non-qualified ordinary dividends to determine net after-tax portfolio yields.
Dividend Tax & After-Tax Yield
Dividend Taxation Formula
Qualified Tax = Qualified Dividends × Long-Term Rate (0%, 15%, 20%) | Ordinary Tax = Ordinary Dividends × Marginal Ordinary Rate | Total Tax = Qualified Tax + Ordinary Tax- Qualified Dividends: Paid by US corporations or qualified foreign companies meeting the 60-day holding period rule, taxed at preferential long-term rates (0%, 15%, 20%).
- Non-Qualified (Ordinary) Dividends: Dividends from REITs, BDCs, bond funds, or short holding periods, taxed at regular marginal ordinary income tax rates (up to 37%).
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Qualified dividends satisfy IRS Section 1(h)(11) holding period criteria.
Frequently Asked Questions
Why are REIT dividends taxed higher than normal corporate stock dividends?
Real Estate Investment Trusts (REITs) do not pay corporate income tax at the company level. Instead, they pass profits untaxed to shareholders, which makes their distributions non-qualified ordinary income (though many qualify for the 20% Section 199A QBI deduction).
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