Tax rate on dividend distribution
Dividend Distribution Tax Rate: While there is no tax on dividends when it comes to investors, there is a tax that the company will have to pay and it is paid at the rate of 15%. This rate will also apply to dividends that are distributed by domestic company from the profits earned by its subsidiary that happens to be a foreign company. Under current law, qualified dividends are taxed at a 20%, 15%, or 0% rate, depending on your tax bracket. Ordinary dividends and qualified dividends each have different tax rates: Ordinary dividends are taxed as ordinary income. Qualified dividends are taxed at a 20%, 15%, or a 0% rate, under Dividends aren’t free money — they’re usually taxable income. But how and when you own an investment that pays them can dramatically change the dividend tax rate you pay. There…