I’m a big fan of dividends because of the favorable tax treatment so this article on Smart Money about the impending spike in tax rates on dividends caught my eye. It’s a little sensationalist in the sense that the cited increased rate, 43.4%, applies mostly to “high income” individuals in the highest tax bracket and subject to the new 3.8% “Unearned” Investment Income Tax, established by the health care reform law.
If you aren’t interest in gory details, basically it’s a 3.8% on unearned income for single filers whose AGI exceeds $200,000 ($250,000 for married filing jointly) starting in 2013 and it’ll be used to help fund Medicare. If you’re like me and want to see the details, here they are:
(Click to continue reading…)