Qualified Dividends Fully Explained (How To Pay Less Tax On Dividends) |Dividend Income Investing

Qualified Dividends Fully Explained (How To Pay Less Tax On Dividends) Qualified vs Ordinary dividends explained. Why qualified dividends are so important within a taxable account.
This video fully explains the following:
- Why qualified dividends are so important within a taxable account.
- How to make your dividends qualified
- When you are ineligible for qualified dividends
- Fully example of determining qualified dividends
If you like qualified dividends let me know by SMASHING that like button, and by leaving a comment below. Your engagement really helps to grow this community. This channel would not grow without you guys. Thank you for helping the channel reach 23,000 subscribers!
1:20 - Ordinary dividend tax rates
1:37 - Qualified dividend tax rates
2:34 - When qualified dividends are not allowed
3:40 - How to get qualified dividends (Rules for qualified dividends)
5:30 - Qualified dividend income example
Other important videos in this series
- Dividends vs wages - • Taxation of Dividend I...
- How we make roughly $400 per month in dividends - • Our Dividend Income Gr...
- How we started from $0 invested to 100's per month - • How We Started Dividen...
Other important videos:
How To Buy Dividend Stocks: • How to Buy Dividend St...
Roth IRA Rules Explained: • How Do Roth IRAs Work?...
How Rich Can A Roth IRA Make You: • Roth IRA Tax Free Reti...
To learn the differences between investments accounts follow this link: • Which Investment Accou...
Our complete investing library can be found here:
Stock Market Investing: goo.gl/hi2kK4
Dividend Investing Playlist: goo.gl/njSrk2

[@huong-f9t]

Bullish or bearish, AI stocks will still dominate 2024, even beyond. Why I prefer NVIDIA is that they are better placed to maintain long-term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA. I'll also take these other recommendations you made.

[@braidenchesnutt]

I agree, just because the market presents opportunities doesn't mean we should rush in headfirst. For this reason, we should look for appropriate market analysis or guidance or seek advice from certified market strategists.

[@latoyia-z3n]

@@braidenchesnutt No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit a 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024.

[@huong-f9t]

@@latoyia-z3n Can you share details of your advisor? I want to invest my increased cash flow in stocks and alternative assets to achieve financial goals.

[@latoyia-z3n]

@@huong-f9t Victoria Carmen Santaella is who I work with and she is a hot topic even among financial elitists. Just browse, you’ll find her, thank me later.

[@huong-f9t]

@@latoyia-z3n I will give this a look, thanks a bunch for sharing.

[@MoneyandLifeTV]

Hope this info came across ok and it makes sense. Thanks for continuing to make this channel awesome by leaving a like and commenting and Thank you for over 23,000 subs! So blessed to have you all in my life.

[@mattx9260]

is a cd a money market account?

[@MRG365.]

@Money and Life TV If I had $38,600 in income and an additional $10,000 in qualified dividends income, will my qualified dividends add to my income and make me have an income of $48,000, making my dividends be taxed at 15% and my incomebe taxedat a higher rate? Or does it stay separate, and my $38,000 in income stays taxed at its normal tax bracket, and the 10,000 in qualified dividends is taxed at 0%?

[@mitchtheh4x0r]

What if the reit is in Roth ira

[@MRG365.]

@@mitchtheh4x0r No taxes on reits if it's in an Roth IRA

[@Pteromandias]

I don’t think it depends on the payout date. The tax code says you have to own the stock more than 60 days WITHIN a 121-day date range centered on the exdiv date. So as long as you hit 60 days some time between 60 days before the ex Div, and 60 after. If you owned the stock 60 days before and sell the day after the report date you’re fine. If you buy the day before the exdiv date you have to hold it for two months. The reason for this is they don’t want people making money on short-term market moves based on dividend payouts and get to enjoy essentially the long term cap gains rate. If you make money on short-term moves, you’re going to have to pay the short term cap gains rate which is your marginal income tax rate.

[@alexandrasjunkdrawer]

and I love you, too!!! Thank you so much for your channel. My young-adult brain is exploding in size because of your teachings, and it makes me less scared of being a mid-adult! I'm so much more comfortable. You're such a blessing!

[@MoneyandLifeTV]

Ali, thanks for all of your kind feedback. That means the world to me. Plenty more content to come :)

[@nstevens81e]

Once again you've crushed it and reinforced my preference to be an income investor. You made it simple and easy to understand the difference between qualified vs ordinary dividends. Motivated me to get me more of those qualifieds.

[@MoneyandLifeTV]

Passive income with less tax is the way to go brother. I would never want to discourage someone from investing for growth as well, but I'm pretty hooked on buying income producing assets lol. Even Kevin O'Leary from Shark Tank is all about investing for cashflow. His passion for income investing left an impression on me. I was fortunate to see him at a conference I attended a few years back in Las Vegas. Aside form dividends real estate is next on my list. Hopefully within the next two years we hope to buy another property and rent out our current home. I want my retirement to be full of dividends, and rental income my friend :) I've seen enough tax returns now to know that is what the rich are doing.

[@nomadkickbox4049]

Great video on qualified dividends! 1) NO REIT or MLP 2) HOLDING PERIOD: Over 60 Days to qualify your Stock or ETF

[@MoneyandLifeTV]

Thanks Nomad :) Appreciate your comments and input.

[@ewlinitis]

So REITs dont qualify its dividends ? What a bummer. Was counting on it to help with my DRIP in my taxable account. I guess it doesn't matter either way. It's free money.

[@thecolonel4551]

Since a REIT is a profit "pass through" entity and also by law must pay 90% of profits as Dividends to share holders - they are "essentially" a Tax-Free entity. Thus, as always, someone has to pay the tax, guess who? The Dividend recipient.

[@TheBasicConcept]

I always had a hard time explaining this to friends and family until I looked at my own statements and graphed it similar to how you did it lol. I thought it was 121 days until I saw my statement. But good news is that you can avoid taxation completely by choosing the right account type. Cheers. Great video

[@MoneyandLifeTV]

They don't make this stuff easy do they? Thanks for commenting really glad you enjoyed the video. 😀

[@knifebox1366]

Thank you for making this video. I'm a new investor and I bought a decent amount of reit. Lol I didn't know they couldn't be qualified dividends.

[@MoneyandLifeTV]

Hi Knife box! Thanks for commenting. Don't worry brother, I did the exact same thing. I didn't learn reits couldn't receive qualified dividends until about 2 years ago. It makes sense though to me as a tax professional, because if you had a rental property....that rental income would be taxed at marginal tax rates (Oridnary income rates) so Reits are no different. Its like normal rental income in the form of a dividend.

[@laxistgaming3030]

Hey good video and thanks for the tips I will defiantly use them as i'm starting on my Dividend investing journey!

[@MoneyandLifeTV]

Nice Tyler! Congrats on starting your journey.

[@coingalaxy8249]

Awesome Info. Thank you so much!

[@matthewszasz1895]

I was looking to do this research myself... Thank you for posting this well thought out video

[@matthewszasz1895]

I'll do some digging to verify what you discussed, this was fantastic.

[@lukaszibaitis3853]

Love this explanation! Just found your channel and loving it. Quick question about the last example of the dividend being ordinary because it wasn't held for 60 days before payout - is that to say that if this shareholder kept their shares until the next quarterly payout, would that dividend then be considered "qualified" given it's been held for far longer than 60 days?

[@domingovillarreal640]

Freaking Awesome. You have helped make this so simple. Thanks a million!

[@MoneyandLifeTV]

1:20 - Ordinary dividend tax rates 1:37 - Qualified dividend tax rates 2:34 - When qualified dividends are not allowed 3:40 - How to get qualified dividends (Rules for qualified dividends) 5:30 - Qualified dividend income example

[@tovionline]

5:16 Feminine tampons.?? .. ah.. also "tax favorable" .. got it! :)

[@MoneyandLifeTV]

Haha nice catch. I honestly didn't notice that when I was putting this together..... i guess i need to look at that stock b-roll footage a little closer going forward doh!..........Was just trying to find a video clip with a calendar in it. Got more than i bargained for apparently lol

[@amadeodante]

So if I buy a put order on a stock will all the dividends be non qualified

[@g3tv735]

Great video. Thanks for the explanation. Very helpful 👍

[@MoneyandLifeTV]

No problem 👍

[@ceciliaruns72]

Great info! I was wondering about all this! Now I know! 😂

[@MoneyandLifeTV]

Thanks Cecilia! Also, thank you for letting me know you found this information useful. I learned a lot trying to put all of this together :)

[@PassiveIncomeTom]

Mike great explanation and detail on the pay out date.

[@MoneyandLifeTV]

Thanks Tom! I'm a visual learner myself, so to make sense of it I had to visually lay it out to fully understand what the article was trying to tell me. When I plotted it out, in excel, I couldn't believe how many different dates there were to keep track of lol. I've learned over the years as a CPA when trying to explain tax, visuals help a lot so I applied the same methodology here :) Glad you found the additional detail helpful.

[@ankitarm46]

Great 👍 knowledge 👏👏👏 Find it very useful as a student of tax. Thank You 😊

[@MoneyandLifeTV]

Awesome! Thanks Ankita ;) I didn't understand a lot of this stuff until recently. Continue to be a student of tax. It will save you a lot of money over the course of your lifetime.

[@josephscott6642]

Perfectly explained for me 👊

[@1974dodgecharger]

Thanks!

[@FirefightersFinancialToolbox]

Mike, I am using this video as a link from my dividends video, So people will understand the difference between qualified and non qualified dividends since you are way better at explaining them

[@FirefightersFinancialToolbox]

If that isn’t okay, let me know and I will take down the link.

[@MoneyandLifeTV]

Thank you Firefighter's financial Toolbox for letting me know. I feel honored. Feel free to use it whenever. I appreciate all the support sir :)

[@daver2214]

Thanks for the explanation!

[@MoneyandLifeTV]

Anytime Mr Dave :) Have a great Friday tomorrow. Bring on the weekend. 🍺

[@pablonarez]

Great informative video!

[@dbest4755]

Mike, do you have spreadsheet for download ? this is good info !!

[@EvangelistRBColbert]

Awesome info to have at your fingertips!

[@MoneyandLifeTV]

Thank you RB! I wish more people knew about this stuff.....I totally nerded out once I learned about all these tax advantages 😆

[@EvangelistRBColbert]

@@MoneyandLifeTV - I put a little money into one of the Zero fees Index Funds by Fidelity today. Started off small so I could see how it performs first etc.

[@MoneyandLifeTV]

Nice! Thanks for sharing this. I like the fact that you started off with a small position. 9 times out of 10 I have never regretted starting off small. You can always add more to it later if it's moving in the direction you want it to :)

[@EvangelistRBColbert]

@@MoneyandLifeTV - Yes😊

[@japanboi7]

Hey again. The timing of this video was spot on. One thing to note, I checked my tax return and got qualified dividends from my employee stock plan. What is the reasoning that it wouldn't be qualified?

[@MoneyandLifeTV]

Hi Ryan, you can receive qualified dividends (to the best of my knowledge) from an employee stock plan. It wouldn't qualify though if your employer was issuing you "stock options" which are different from just owning shares of a particular company.

[@rodd919]

@Money and life TV first of great videos on helping newbies like myself understand Dividends. The SPHD ETF dividend is this a qualified dividend for capital gains tax?

[@MoneyandLifeTV]

Rodd how's it going man? I don't personally own SPHD, but I looked at the list of companies it holds and it should be able to provide both qualified and non qualified dividends. Best way to tell is look at your monthly statements after holding this for a few months and look at the dividend descriptions to see if they are qualified or ordinary. Hope that helps :)

[@johnb1571]

whats your thoughts of IEP in a brokerage, will it be qualified dividends since its NOT an MLP?

[@batman7knight]

Yessssss thank you Mike!!! #GameChanger

[@MoneyandLifeTV]

When I get batman's approval I know I must be doing something right. God bless Gotham!

[@lonestarsapper7d]

Spot on. Nice work

[@MoneyandLifeTV]

Thanks Mlong! I appreciate the feedback.

[@thescentsophisticate8865]

awesome video!!!!

[@MoneyandLifeTV]

Thank you! I'll keep um coming as fast as I can ;)

[@ladiesman14543]

Great info, thanks!

[@MoneyandLifeTV]

Thank you Dan for watching and for letting me know this was helpful. I'll keep cranking out these videos as fast as I can.

[@ladiesman14543]

Money and Life TV looking forward to them!

[@yan.c.ospina]

You Hi I have a few questions about how dividends from investments are taxed. I have normal dividend stocks but I also have etfs, mlps, and reits. I know these are treated a little differently. Question 2, I have a long term account in which I reinvest all my dividends. This account has etfs, reits, and mlps. I also want to start another account with only monthly payers so I can use this account for current income. Do you think that would be a good idea from a tax perspective?

[@hailu9504]

Is there a way to know which stocks are on the list? With stocks that has property or real estate in their name, I know it's a REIT but others on the list. I have no idea. Thanks.

[@DT817tx]

Hey mike, I would like to hear your thoughts on QBI now that you went through a tax season dealing with it. If you have any tips or tricks you can share!

[@MoneyandLifeTV]

Hi DJThecon, great question. I haven't had to work with it too much since tax season, however, I know the new worksheets around QBI will go into play for 2019. (I think they are already out, or drafts or up, I need to check). I think the new IRS worksheets will hopefully make it a little more straight forward. QBI has so many pieces and rules it's hard to not miss something. My advice is take your time and use spreadsheets, or whatever tools you can to compute it. Tax software is designed to do it automatically, however, it is important to take the time to reverse engineer how the tax software is arriving at the answer to fully understand it and to ensure its correct. Sometimes software isn't always right about things.

[@toastedtarts4044]

You made a mistake but put in all the work and figured the right answer. Thanks for sharing. This is really good to know.

[@MoneyandLifeTV]

Thank you for commenting Joefrenne, and for the positive feedback. 😃 Happy to hear you got something out of the video.

[@FinalManaTrigger]

So if you are constantly buying more shares of a stock, and some you've owned over 60 days and some are new, are they broken down into qualified and regular when they pay you the dividend?

[@jjp4119]

Hi there Ty for your postings. I enjoy it and find it quite informative. My Q is does the state of CA also tax you on qualified dividends separately in additional to the 24% in my case? And if yes, roughly what %? If then, can I relocate to FL or WA and avoid the state capital gains tax component in the future?

[@MoneyandLifeTV]

Hi James, just found your question. Ca taxes dividends at California ordinary rates. You would have to determine what your ordinary tax bracket you are in for California to determine that amount. I think I pay like 7% to CA. If you left California you would be able to avoid that tax hit.

[@takapurio]

Thank you for the great video. Do the same rules apply if you hold US dividend paying stocks from abroad?

[@MoneyandLifeTV]

Great question takayohsi, however, I do not know the answer if i'm being honest. Each country has very unique tax laws so it depends on what country you live in, and how that country treats dividend income for taxation purposes.

[@DT817tx]

Takayoshi Nakamura G. International tax is very complicated!

[@leonareyna581]

If you have dividend stocks in a roth ira this doesn't really matter right? From what I understand any gains you get in an IRA are not going to be taxed? Everything is non-taxable?

[@iankingston1036]

Hello Mike I love your explanations about qualified dividends. HOW DO I REQUEST A AN INVESTORS STATEMENT. I JUST STARTED INVESTING IN DIVIDENDS. IT HAS BEEN 1 MONTH NOW. THANK YOU!

[@MoneyandLifeTV]

Ian, really glad to hear you are enjoying the content. Are you referring to your account statement? To request your statement probably the easiest way is to login online to your brokerage platform. Your brokerage company should be archiving all of your monthly investment statements. These statements should contain the detail of the dividend transactions within your portfolio. Hope that helps :) Most brokerage firms now no longer send paper statements unless you specifically request it (or pay for it).

[@MrMarkCaudill]

Good information to know.

[@MoneyandLifeTV]

Thanks Mark, when I pulled this information together I couldn't believe how complex it can get, but it was worth studying haha.

[@noel888]

For years I do my own taxes manually on paper. Each year i get ordinary and qualified dividends. Looking at my 2017 1040 papers, I see that Qualified dividends is not included in to the adjusted taxable line...the form says to only add all of the amounts above, in the right column. Qualified is only in the left column. Now how can one get the benefit of lower tax rates on the Qualified bunch, if its included today in that adjusted taxable income line? I can't go back to 2018 or 2019, cause I moved and lost those 2.

[@Asstronauts93]

If I buy new shares of the investment every month that I hold are those new shares also producing qualified dividends?

[@noel888]

I sold some shares of my fund with a small gain. I also have Qualified dividends which I omit when I start my 1040 form in totaling. So how then can I figure the Qualified dividends to the lower tax rate, if I have to fill out also Schedule D? I know there is a qualified dividends and capital gains worksheet which will give me the lower tax rate, but do i have to fill out both the 8949, Schedule D and the worksheet for Qualified Dividends? The instructions are too confusing.

[@makingmoveswithmattadams1268]

Great Information As Always Brother!!! Best To Buy And Hold !!! 👍🏻👍🏻👍🏻

[@MoneyandLifeTV]

Yes sir! I'm about keeping it simple. I find simple works best the majority of the time.

[@makingmoveswithmattadams1268]

Definitely Works For Billionaire Buffett!!! 🙌🏻👍🏻

[@MoneyandLifeTV]

You mean Mr. Monopoly :) lol

[@makingmoveswithmattadams1268]

😂😂😂

[@thesweatreliefcompany2512]

Do I subtract box 1b qualified dividends from box 1a ordinary dividends before calculating the amount of ordinary dividends I have to report on line 3b of my form 1040?

[@mikein60fpstwitch.tvaliber73]

Nice, the info you really need to know, as opposed to the info you "THINK" you need to know- ie.. get rich quick in the stock market info. lol @6:14 good times... -Cheers

[@MoneyandLifeTV]

Thank you Mike! Also, for noticing that I try to teach people info that ACTUALLY matters, or at least what I think matters haha. Finally, thank you for laughing at my poor attempts at humor 😆😜

[@dand.939]

Can an LLC do the same setup for qualified dividends? So instead of paying member/members a wage, they are paid a dividend instead (with the same date setup)? Thanks.

[@MoneyandLifeTV]

Hi Dan, great question, but I don't believe so. The LLC can own investments that pay dividends, but you wouldn't be able to substitute wages for dividends. The tax treatment is going to be based on the source of revenue within the LLC which is typically ordinary business income or rental income for most LLCs. In other words, you would not be able to convert that type of revenue to a dividend revenue for tax purposes to the best of my knowledge. Hope that helps.

[@michaelfenell3602]

I have two questions about this. What if I buy stocks and get the qualified dividend payment and have DRIP on, would those new dividends that I earn be qualified or non-qualified? The second question is what if I have stocks for a year and buy more stocks 10 days before the ex-dividend date. Would I get qualified since I already owned stocks or would the new dividend payment be non-qualified? Thanks, sorry if that does not make the most sense. If you have any questions about what I am asking let me know.

[@lisah6799]

🤣😂🤣🤣 I completely lost it when you told that back story.

[@MoneyandLifeTV]

😂😋 Gotta have that back story ;) Thank you for letting me know that my poor attempts at humor are paying off.

[@Petal676]

If you only buy ETF hold more than a year does it's counting as capital gain category tax rate？

[@christopherblain6156]

Thanks Mike. Thanks Chipper.

[@MoneyandLifeTV]

Thanks for the support Chris! Chipper thanks you as well. After all, Chipper is the true star of the show. I'm just the puppet behind the camera. ;)

[@emikami1]

@@MoneyandLifeTV Produced and Directed by Chipper. Staring Chipper. Extra Mike. As usual, great content with lots of detail. This must be a lot of work to do every week. I wonder if the next topic is Qualified Dividend on _Preferred_ Stocks....

[@MoneyandLifeTV]

Your comment made me bust up Emikami1 haha. I'll be honest I really enjoy putting this type of info together, but it is a lot of work and research. I've been trying to crank out 2 videos per week, but realistically I know I cannot always meet that level of demand. Chipper is sure trying to slave drive me though ;) My next dividend investing video probably won't be out for about 2 weeks, because I need to put some materials together, but I promise it will be a fun one :)

[@decsaclayan4393]

Hi Mike, love watching your videos and the information that you provide. I have a question on Master Limited Partnerships? If I buy and hold a Master Limited Partnership in my Roth IRA account will it be taxed at retirement or does it grow tax free just like REITs? Thank you.

[@MoneyandLifeTV]

Hi Dec, great question. If the investment is held in a roth. It will come out tax-free. Plus if held in a Roth, no complicated tax filing for the K-1 you will receive. That is a bonus perk :)

[@decsaclayan4393]

@@MoneyandLifeTV wow, that's fantastic. I've been looking at some Master Limited Partnerships lately and I didn't know whether I should hold them in my taxable account or in Roth IRA account. Thank you so much for answering my question. Looking forward to watching your future videos.

[@MoneyandLifeTV]

Thanks Dec, ya with MLPs they are great for retirement accounts. They are very complicated from a tax reporting standpoint until you get used to looking at K-1s. However, long as in retirement account you do not have to worry about that aspect of it.

[@moneymotivationmadness3275]

What is I buy 1 share. Hold it for 121 days. Then buy 599 shares before the ex div date does all 600 count or just the first one?

[@kelb5904]

Hard to understand. It shouldn't matter when the payout date is. I thought it was so long you hold the stock? If you buy it before the ex-dividend date and hold it 60 days. Isn't it that the two qualifications?

[@KH-bp2qh]

Question....if I have a stock (paying qualified dividends) and I want to buy more shares with some extra cash I have (all of my current dividends are already auto re-invested)...will all become Qualified Dividends or do they start out as needing to hold for a year? ALSO...I inherited these stocks so I desperately need to understand how the capital gains work (I have held them for over 3 years already...again...all of my shares are re-invested so does that make it more complicated? Anything with inherited products would be greatly appreciated. Thank you!!!

[@azhawkeye]

What's the difference between a Master LP and just an LP?

[@mikecase9365]

So let's say you have a stock and a handful of stocks that you have owned for well over the qualifying period. You purchase more stock but that stock isn't long enough to qualify in this period and dividends are paid out. Does a portion become quailified or does it all just become common etc?

[@MoneyandLifeTV]

Hi Mike, love your question. To my understanding your older shares of stocks would be qualified, while your newer shares of the same stock would be paying out ordinary dividends until you have held onto them long enough to be qualified.

[@Darknight526]

Hey Mike, great video but I have a question. What if you bought the shares: Date Purchased 1: 5/13/2019 Date Purchased 2: 5/27/2019 Ex-Div Date: 5/14/2019 Payout Date: 7/5/2019 Holding Period Met if held past: 7/14/2019 Would the dividends be qualified or ordinary?

[@KH-bp2qh]

What does it look like on a tax return? My accountant has always done my taxes and I only for the first time have time to try to understand what has always been done for me. How do I know if my accountant has done my Qualified Dividends correctly? It looks like it was all just added to my taxable income! Ugh Thanks.

[@EarnestKaraoke]

Thank you for the informative video! I have a quick question. I live in Canada and have a few ETFs in TFSA that I hold less than 60 days. I have received dividends from those ETFs. Are those considered non-eligible dividends? Thank you in advance.

[@MoneyandLifeTV]

Hi Earnest, because it follows Canadian tax laws i'm not sure sorry. I bet you could ask the broker that question though.

[@fmilan1]

Hello. I have one question. I have about 10K of emergency funds that must be available to me immediately. But I keep them in a savings account today, which does not protect me from inflation. So, I want to ask you about BONDs. (1) How are the gains on bonds taxed? (2) How can I put my emergency money on bonds? And, if I do, how fast can I access that money in case I need it?

[@MoneyandLifeTV]

Hi Fabio, all great questions. The interest you generate from bonds is taxed the same way your interest is taxed on your savings account. The only difference is you can expect to receive a higher yield. Bonds won't entirely protect you from inflation unless you go the route of corporate bonds which are a bit riskier. If you want to be in bonds and remain liquid I would suggest bond etf funds. I have two videos that cover Vanguard's bond funds. Short-term bond funds can be found here: kzbin.info/www/bejne/f6HFanSLhNF7rc0 and Vanguard's long-term bond funds which can be found here: kzbin.info/www/bejne/gIPZlZl8nrNlhNk Short-term bond funds are more adept to interest fluctuations, but the videos will explain the basics. Bond funds can sell off just like stocks so you can turn your bond etfs into cash very quickly. Hope that helps.

[@josevillanueva9632]

Hi I’m a complot ignorant on this business can you give an idea on a 10k investment at a 9.23% yield what the monthly dividend be in $$ thank you awesome video

[@hmj8469]

Great video. It seems to me that finding a portfolio of stocks that pays at least 6% dividend is fairly easy. That being said, would you recommend someone with $500k who cares more about cash flow than appreciation to invest in dividend paying stocks vs buying real estate and renting it out?

[@zhaoc033]

Can you briefly explain how bond is taxed? Lets say i buy some bond (US Corporate bond) at discount at $90 and sell a year later (before maturity) at $95. So I make $5 from this transaction. I also make say $10 from coupon payment. How are the $5 and $10 taxed? Are they taxed at ordinary income tax rate or are they taxed at some other rate?

[@robertbarry1792]

How are dividends treated for NUSI?

[@trscsaeg]

New to investing. How do you know if it's a reit or regular dividend that can become qualified

[@MoneyandLifeTV]

Hi Trscsaeg, congrats on starting investing. To answer your question the first thing you want to look for is if the investment is a "REIT" on yahoo finance for example you can read it in the description section about the company. If it is a REIT they will list it. Follow this link to one of the REITS I own currently. finance.yahoo.com/quote/EPR?p=EPR&.tsrc=fin-srch-v1 follow the link and scroll down the page. On the right handside you will see where it describes the investment as a reit under the company description. Generally speaking most investments are not Reits. However, if are looking at a new investment and it holds a lot of real estate it might be a reit so read up on it before buying. Hope that helps :)

[@timmy101able]

So when looking at ETFs with dividend.. does the dividend yield list have the expense ratio already factored in or do you have to subtract that to really get the number? Also is the expense ratio/percent a ratio of the total cost of the stock or the dividend amount? Thank you.

[@MoneyandLifeTV]

Hi N SR i'm not 100% sure, but I believe you would need to subtract out the expense ratio percentage. How they determine that fee i'm not certain. Probably be best to ask the broker that question if you cannot locate the answer on their website.

[@maigematthews5620]

Please, can you do a revamp of this 5 year old, tax advantage strategy? Also, can you show us where to find out whether the dividend stock, REIT or ETF is indeed Qualified? And a small list of qualified dividends please? I’ve only seen about 3 videos about this subject, and that’s including this one! It’ll also be great if you can show how to file the tax for this.

[@KevinPerez-fd9xq]

I know I’m three years late to this video but Do you have a link where this can be found on the IRS WEBSITE?

[@JN-et8wu]

REIT into ROTH, and qualified in a taxable acct? What do you think? If I want to retire way before 59 1/2, hypothetically...

[@JN-et8wu]

or add REIT to both accts?

[@bobbyboombeck]

Is income fromVanguard's VTSAX considered qualified dividend income for tax purposes? I can't seem to find the answer to that. Thanks.

[@MoneyandLifeTV]

Hi Bobby, it is likely unqualified as most etfs/mutual funds do not provide qualified dividends from my experience.

[@specsbundy1392]

at 9:53 mark i think the scenario still would result in a qualified dividend .. as long as he owned stock the day before the ex dividend date and held it for the next 61 days it qualifies ... that is how I interpret it

[@emailtom7]

Do you hold any Sin stocks in your dividend portfolio like MO, STZ, PM, etc? If no then why?

[@MoneyandLifeTV]

swingtradestocks I used to but at the moment I do not. Also my wife would prefer I didn’t haha. I’m not discouraging it but also I’m not promoting it either. I’m neutral on the matter but the main reason I don’t own it at the moment is because I’ve been focusing on other investments if that makes sense.

[@remy9536]

Hi Mike, I'm new to investment and just started it last year. Your video made me looking back at my Tax Return. I'm confused, my account showed a dividend/interest about $353 for 2018. But, the 1099DV showed 369 for the Ordinary and 304 for the Qualified Dividend. So, in actually, did I actually receive a dividend of 353 or 673 (Ordinary+Qualified Div). Since I do DRIP, I see my dividend share reflects the 353, not 673. Lastly, is it best to have more dividend stocks in the Taxable account or the Roth...or it doesn't matter? Thanks you very much, all of your videos are very informative!!

[@MoneyandLifeTV]

Hi Remy, great question. I'm putting together a Q&A type of video. I like your question so I will add it to the list. I'll let you know when it posts. I think a lot of people would have the same question you do.

[@remy9536]

@@MoneyandLifeTV Thanks Mike, you are the best! Can't wait to see your Q&A video.

[@Unclebuns72]

Hi Mike I bought into NAT on 4/23 and it’s dividend payout is on 6/5. So that would mean than my dividends won’t be qualified, correct?

[@MoneyandLifeTV]

Hi Taylor, likely not at that point. Usually has to be more than 60 days, but your next payment beyond that should be qualified.

[@Unclebuns72]

Money and Life TV thanks Mike!

[@akshayshah7472]

Cool 😎❤

[@MoneyandLifeTV]

Thanks boss!

[@vincentdesapio]

Dividends on preferred stock also receive ordinary tax treatment, not qualified tax treatment. By the way, do you know where 199A dividends from REITs are recorded on the 2019 1040? I can't find it anywhere.

[@MoneyandLifeTV]

Hi Vince, that would fall under the line for "qualified business income" If you qualify, but that is where those amounts should come through.

[@vincentdesapio]

t

[@inconvenientexistenlism]

Does the consideration for qualified dividend count for EACH STOCK? For example, if I purchased 100 brand new shares of a company then a month later add 10 more stocks, would it be just the 100 shares that count as qualified or all 110 shares because it’s just the brand new company position that I didn’t own before. Based on this realization, is this a way of saying to never buy stocks towards the end of the year or early of the year when it’s so close to tax filing deadline in April because those new stocks won’t have ample time to make it past the 60 days minimum to transition from ordinary to qualified dividend?

[@MoneyandLifeTV]

Hi Jason, I hope you had a great thanksgiving. To my understanding and based on what I can tell from my current portfolio it appears once they are qualified all new shares can be qualified as well. There is a small chance that is not the case, but I haven't personally experienced that. Once my shares were qualified it appears all my dividends were qualified from that particular company. Hope that helps boss.

[@delafe]

The one point which is not clear is whether or not qualified/ordinary is retroactive in the tax year. So- I buy T on January 1st, it goes Ex Div Feb 1st and pays monthly. Will the first two dividends be ordinary and the remaining 10 qualified or are all 12 qualified because I owned the stock the entire calendar year?

[@MoneyandLifeTV]

Great question Alfredo, for tax purposes your ordinary dividends will be tax at ordinary tax rates, once dividends become qualified the remaining are taxed at capital gain rates. They are not retroactive.

[@delafe]

Money and Life TV figured as much, just wondered because for many things state and Fed treat things on a calendar year basis. Also, how do most states treat dividend income?

[@theg35project50]

4:20 THANKS A LOT NOW I LOOK STUPID 🙊🙊🙊 was watching in public with headphones and completely laughed out loud🤣🤣🤣 now everyone Is staring at me 😖😖😖

[@MoneyandLifeTV]

Thanks for taking one for the team :)

[@delafe]

This is probably way outside the scope of this video, but maybe it will inspire you to cover it. ;-) I have been considering setting up an irrevocable trust and putting my portfolio and home into the trust (still trying to figure out if it is worth the headache). How are dividends treated in the case of a trust? Can a dividend be qualified?

[@briandixon870]

Hi Mike, I'm a UK investor who recently started investing in shares on the US stock market. Is the withholding tax for foreign investors treated in the same way for qualified dividends or will I still be subject to the 15% withholding tax?

[@MoneyandLifeTV]

Hi Brian, great question, however my tax knowledge is limited to US tax law. I believe the tax would follow the country you live in. Also, I believe the brokerage firm you are using automatically withholds taxes on foreign based investments. However, you might run this question by them to see what they recommend.

[@briandixon870]

@@MoneyandLifeTV Thanks for getting back Mike. I'll drop my broker a line see what they say. Much Obliged 👍.

[@nattyp7801]

So monthly paying dividends isn’t considered qualified ?

[@FlummoxedAgain]

When I read through the requirements it leads me to believe that if you hold it for 61 days DURING the 121 day period then it will be qualified. So if you purchased 2 days before the Ex-Div Date and held onto it for 61 days then it would be qualified when you file your taxes. Example: Date Purchased 5/13/2019 Ex-Div Date 5/15/2019 Payout Date 7/5/2019 Holding Period Met if held past 7/14/2019 Then it would still be qualified even though you had not held it for 61 days before payout. Am I missing something???

[@MoneyandLifeTV]

Hi Flummonxed, after revisiting the article you may be correct, but I cannot say for sure. This wasn't how I originally interpreted the article when I first read it, but now that I reread the article it does seem as long as you hold the investment for more than 60+ even after the payout date has occurred that the dividend may eventually be reclassed as a qualified dividend for tax reporting purpose. I'm not 100% sure, but I understand your point of view here, and glad you pointed this out.. I wish investopedia had offered a few more examples to add perspective, however, moral of the story here is hold on to the investment and qualified dividends will eventually come. Also check your monthly statements and see how the dividends are being classified. Thanks for commenting Flummoxed :)

[@FlummoxedAgain]

@@MoneyandLifeTV Exactly. I have no plans on selling, just making sure I understand the Legal Mumbo Jumbo... :)

[@MoneyandLifeTV]

Right on brother 👍 They don't like to make this stuff straight forward lol

[@kennethchow3996]

Better than buying bonds that does not have triple tax free advantage like munis.

[@lslurpeek]

I’m not paying anything in taxes since it’s all in a Roth IRA and my tax bracket is pretty low with my wife going back to school

[@MoneyandLifeTV]

Nice! Keep it that way as long as you can Lance. Think of the retirement we could all build if the tax man wasn't trying to get their cut.

[@mtwn]

Maxed out my roth for 2019 and 2020.....sitting at 14% return. What to do now?

[@jasonlin9311]

So let take this as an example: in order for ordinary dividend to be qualify, the stock needs to be hold at least 121 days? And for long term capital gain. How long do I need to hold it? Does it required a number of shares to be qualified or just 1 share of that company

[@MoneyandLifeTV]

Good questions Jason. The way I understand it is this. For a dividend payment to become qualified you need to hold it at least 60 - 121days . Somewhere within that time period the dividend payment will become qualified. Long-term capital gain from sale of stock however, you need to hold 1 year and 1 day before selling. 1 share is enough

[@jasonlin9311]

@@MoneyandLifeTV what if you dont sell at all. Hold for life.

[@jbro6236]

What about dividend reinvestment? Does that have to meet the 61 day rule as well?

[@MoneyandLifeTV]

Good question. I think once your original shares are qualified I think it all becomes qualified if I’m not mistaken

[@jusrarsh4109]

RQI is a good one.

[@MoneyandLifeTV]

Thanks Jus, i'll check it out.

[@ivanthelion2829]

So I should sell my real estate dividend?? I'm new and in the low tax bracket got 29 shares of O :/ I got it because of the solid dividend pay monthly

[@ivanthelion2829]

O is Reality Income btw

[@troysmith749]

My taxable income is less than 60k. I have a REIT with Fundrise and reinvest my dividends. Have not cashed out. Is that a qualifying dividend ie not paying taxes on that?

[@MoneyandLifeTV]

Hi Jaximus, REIT dividends are not allowed to receive qualified dividend treatment therefore the dividend income would be taxable to you even if you reinvest it the dividends. Sorry :( but that is how they work.

[@parkedcarhitme]

I was thinking of putting all of my REIT investments in a IRA to benefit from the higher dividends with out getting taxed and having my dividend stocks that can be considered qualified in a regular brokerage account 🤷‍♂️

[@irisypadilla]

CLM Cornerstone Strategic Value Fund- in theory is never going be issue qualified dividends ?

[@MoneyandLifeTV]

Hi Irish, not sure to be honest. Many funds do not throw off qualified dividends, but individual stocks do.

[@sonyboy917]

So what would happen if for example I get qualified dividends from Verizon for 10shares. I keep those 10 shares alone, never touch them. And then I buy and sell Verizon shares for day trading or swing trading. Will that mess with my qualified dividends? Or no because those 10 shares I've never sold are qualified? Is this where FIFO and LIFO can be an advantage? 🤔

[@sonyboy917]

Or what happens if I have 1 account for long term dividends. Never touch them. But trade the same stocks on a different account? Would that effect the qualified dividend?

[@MoneyandLifeTV]

Other important videos in this series - Dividends vs wages - kzbin.info/www/bejne/emO7gXyrnsl0nqs - How we make roughly $400 per month in dividends - kzbin.info/www/bejne/eoKXdnyEZdyBq6s - How we started from $0 invested to 100's per month - kzbin.info/www/bejne/hHrQmWqvmLGNfdk Other important videos: How To Buy Dividend Stocks: kzbin.info/www/bejne/n6SnmnWle917Y8k Roth IRA Rules Explained: kzbin.info/www/bejne/aX7di5mIp8x4j8k How Rich Can A Roth IRA Make You: kzbin.info/www/bejne/aJ_bYal-fLOJo6c To learn the differences between investments accounts follow this link: kzbin.info/www/bejne/fKC6q6CAqZqAaaM Our complete investing library can be found here: Stock Market Investing: goo.gl/hi2kK4 Dividend Investing Playlist: goo.gl/njSrk2

[@kokalti]

What if you keep purchasing the stock every couple of weeks. You have shares that you held for more than 60 days but some shares of that same stock that you bought recently. How does that work with getting Qualified Dividends or not?

[@MoneyandLifeTV]

Great question, In that case some shares will be qualified while the newest shares will still be treated as ordinary until the 60 day period has passed.

[@kokalti]

@@MoneyandLifeTV Thanks for the reply. Yea I own SCHD etf and some shares I bought were more then 60 days and other were less. I got my first dividend from them and on my brokerage statement it seemed to label everything as ordinary dividends. Not sure why that is. Maybe in a tax form at the end of the year it will be sorted out better.

[@1pyroace1]

Do u have to pay more taxes on dividends if u never pulled out but reinvest?

[@MoneyandLifeTV]

kzbin.info/www/bejne/j2GyqZh5iJiSfpY

[@goldisrealmoney6658]

I thought REITS qualifies for qualified dividends with the bill that passed in 2018 ?

[@MoneyandLifeTV]

Hi Gold, unfortunately no, however you may be thinking of the 199A deduction.

[@allgood4729]

As a 64 year old, can I open an IRA account and not pay income tax from dividends and interest received?. Thank you and love your videos.

[@MoneyandLifeTV]

Hi All Good "Love your screen name" You may still be able to open an IRA, however, one of the requirements is to have "earned" income from a job or a business. Are you still working all good or have you retired at this point? Thanks for commenting, and for the support.Comments like yours motivate me to keep going.

[@allgood4729]

@@MoneyandLifeTV Thank you for liking my screen name. Actually I never worked and was a stay home mom. So I have no earned income. My investments are due to inheritance money. I sold some of my etfs, after holding them for more than 1 year, due to market highs. Earned good dividends from them plus cd interest. Thanks again.

[@MoneyandLifeTV]

No problem, always happy to respond whenever I have a chance :)

[@canine7236]

If you b make hm less than 38600 a year do you have to pay taxes on dividends

[@MoneyandLifeTV]

Hi Canine, if they are qualified dividends than no because in theory they will be subject to a zero % tax rate if your total income is less than the amount you specified above.