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The ins and outs of tax on “income investments”

Posted by Melanie Posted on Nov 13 2017

All “income investments” (those that pay dividends or interest) aren’t alike when it comes to taxes. Qualified dividends are taxed at your favorable long-term capital gains rate rather than your higher ordinary-income rate. Interest generally is taxed at ordinary-income rates. So stocks paying qualified dividends might be more attractive tax-wise than CDs and bonds. But there are exceptions. For example, some dividends aren’t qualified and are subject to ordinary-income rates, and municipal bond interest is generally tax-free. Contact us for more details