How to pay ZERO taxes on your dividend income in early retirement (legally)

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In this video I talk about how you can pay zero taxes when you retire early with dividend investing. I use a simple 1040 tax calculator to calculate how much dividend income I can generate in early retirement without paying any taxes. All dividend stocks are not taxed equally. It is very important that you understand how your dividends are taxed - the difference between qualified, non-qualified (ordinary), and international dividends.
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#FIRE

Пікірлер: 248

@DividendGrowthInvesting 3 жыл бұрын

Wife: Why are you spending all day learning and talking about taxes? Me: Because the government is evil and unfair. Try M1 Finance: bit.ly/TryM1Finance How to transfer to M1: bit.ly/TransfertoM1 Seeking Alpha Premium (get 58% off): bit.ly/SeekingAlpha-DGI Instagram: instagram.com/dgi_jake/ Dividend Reinvestment Calculator: docs.google.com/spreadsheets/d/1W8UvXLZdEpVX-UPTKiHIT1oYIkj7Omvf30FgB3FTKWY/edit?usp=sharing

@Dave-yw2wc 3 жыл бұрын

Already planning for the future when I'm rich and have to avoid that proposed wealth tax. One day I shall be rich enough to have to figure out how to hide millions from the government, legally of course. In all seriousness a wealth tax would be ridiculous and absolutely immoral. They need to teach people how to obtain wealth in school rather than target those who learned finance and worked to build wealth.

@moppypuppy781 3 жыл бұрын

Who are these people that make +$80,000 a year in dividends? Geezus. I'd be set at $24,000 a year.

@Dave-yw2wc 3 жыл бұрын

@@moppypuppy781 I feel ya, i'm only at 3,500 a year but only been at it for about a year now. Goal is to invest 50k a year. I'll get there one day.

@moppypuppy781 3 жыл бұрын

@@Dave-yw2wc If I was in your position I'd move to a place where the dollar goes further and just be done.

@shazam2323 2 жыл бұрын

the calculator doesnt make sense, how do i know my price per share when my portfolio isn't just 1 stock?

@ronpizur2627 3 жыл бұрын

This is our situation and we paid zero taxes in 2020, our first full year of early retirement. WOO HOO!!

@DividendGrowthInvesting 3 жыл бұрын

That is so exciting!! It sounds like you are living the dream!

@ronpizur2627 3 жыл бұрын

@@DividendGrowthInvesting We are! We are living a nomadic lifestyle and driving around Europe for a few years.

@TheTazz2you 3 жыл бұрын

Can I do this having retirement income 1099r

@ronpizur2627 3 жыл бұрын

@@TheTazz2you , Up to a point. Once your 1099-R income gets over high enough your qualified dividends and capital gains begin to get taxed.

@realfinalsay 3 жыл бұрын

I am one of the few people who actually likes talking about taxes and understanding how it is done.

@DividendGrowthInvesting 3 жыл бұрын

You are in good company!

@ElCatrinMuerto 3 жыл бұрын

Taxes are actually very interesting in my opinion. As I've been researching about investing I've learned that understanding how you get taxed is a huge part of your investing strategy.

@AaronNelsonSQL 3 жыл бұрын

I can't believe I just watched, and payed attention to, a KZfaq video featuring the 1040 form. What is my life coming to?!?

@DividendGrowthInvesting 3 жыл бұрын

full on adulting :)

@claudiacordic3032 2 жыл бұрын

That was fantastic! Thank you so much for your easy to understand information!!!

@matthewszasz1895 3 жыл бұрын

I've been waiting for your post this week. Perfect timing since I was looking for it. Love the channel.

@DividendGrowthInvesting 3 жыл бұрын

Hey Matthew!! So glad you are enjoying the channel!

@JohnCarrFitness 2 жыл бұрын

You have such a high value channel. Thank you for being so detailed!

@DividendGrowthInvesting 2 жыл бұрын

Thank you!!!!

@Edoc-kc9mn Жыл бұрын

Thanks for the info!

@FutileDCF 3 жыл бұрын

I cannot begin to describe how PRIME this content is. Best video you have ever made. Cleared up a couple things I'd been struggling with. A+++

@DividendGrowthInvesting 3 жыл бұрын

Im so glad that the video was helpful!!

@InvestingSolutions23 3 жыл бұрын

Awesome content! I love how your showing all aspects of the financial journey from just starting out to relying on the portfolio for income!

@DividendGrowthInvesting 3 жыл бұрын

Thank you!!

@WayneNicholsInvestor Жыл бұрын

Fantastic video. I had no clue about some of this!

@DividendGrowthInvesting Жыл бұрын

Blows the mind :) Glad it was helpful!

@sebastianguerrero1251 3 жыл бұрын

These videos are the best part of my Sunday nights!

@DividendGrowthInvesting 3 жыл бұрын

Hey Sebastian! I am so glad you are enjoying the channel!

@thomaswinter739 3 жыл бұрын

Great video Jake. I'm not currently dividend investing, but your information is always valuable!

@DividendGrowthInvesting 3 жыл бұрын

Thanks Thomas! This could also work the same for growth stocks :)

@danielrichardson7737 3 жыл бұрын

Love the Ron Swanson/Parks and Rec clip. Keep up the great work! - Daniel in HTX

@DividendGrowthInvesting 3 жыл бұрын

Lol the best!!! Cheers from Austin!

@jenniferg3251 3 жыл бұрын

So good! I'm definitely going to save and watch again to catch more details. Thanks! I love tax efficiency!

@DividendGrowthInvesting 3 жыл бұрын

Yes!!!

@rubenve79 3 жыл бұрын

Wow I didn’t realize the limits would be this high. Thanks for sharing this info Jake.

@DividendGrowthInvesting 3 жыл бұрын

yeah!! Thanks for watching!

@dewaynecampbell9524 3 жыл бұрын

Awesome stuff sir. I learned a ton from you today. Greatly appreciated.

@DividendGrowthInvesting 3 жыл бұрын

Thanks for watching!!

@BeginnersTech314 3 жыл бұрын

See now this is how I learn and understand things thanks for the great explanation

@DividendGrowthInvesting 3 жыл бұрын

I'm so glad that the video was helpful!

@murtazapitalwala6719 3 жыл бұрын

Thanks Jake. Very valuable info as always.

@DividendGrowthInvesting 3 жыл бұрын

Thanks for watching!!

@DejanMac 3 жыл бұрын

good way to end the weekend !

@DividendGrowthInvesting 3 жыл бұрын

You the man Dejan!!!

@gurudattshiwdat4550 3 жыл бұрын

You are very helpful. Thanks. Keep up the good work

@DividendGrowthInvesting 3 жыл бұрын

Thanks for watching!!

@tclequang1487 3 жыл бұрын

I too love nerding this stuff. Thank you.

@DividendGrowthInvesting 3 жыл бұрын

You are in good company!!

@OperationFoodieComa 9 ай бұрын

this information is worth more than any course out there on the subject, just by understanding that 1040 tax estimator alone! THANK YOU for saving me money!

@DividendGrowthInvesting 9 ай бұрын

So glad to hear it was helpful!!

@AaronNelsonSQL 3 жыл бұрын

Small suggestion. If you ever cover this topic again (specifically qualified vs. non-qualified dividends), I would recommend putting two copies of the 1040 calculator on the screen side-by-side. You could then show the difference in tax treatment the same income receives whether it is qualified or not; without having to rely on the viewer's memory. (For someone like me, I'd love to be able to pause the video right there and take in what I'm seeing in front of me.) P.S. Thank you for doing this video. This was the best explanation/communication of the difference of qualified/non-qualified dividends I have ever seen in my life. *PLEASE* keep up the good work 👍

@revlisnaver8288 3 жыл бұрын

this really helped me look into how to manage my future more efficiently , thanks! so much value in this video.

@DividendGrowthInvesting 3 жыл бұрын

So glad this was helpful! I hope you have a great week Revlis!

@revlisnaver8288 3 жыл бұрын

@@DividendGrowthInvesting thank you! You as well Jake!

@RUFUSREX 3 жыл бұрын

Thanks, your video was very helpful

@DividendGrowthInvesting 3 жыл бұрын

So glad it was helpful!! Thanks for watching!

@nynick716 3 жыл бұрын

Great video very helpful!!

@DividendGrowthInvesting 3 жыл бұрын

Thanks for watching Nick!

@TheCollegeMuscle 3 жыл бұрын

Great info thanks!

@DividendGrowthInvesting 3 жыл бұрын

Thanks for watching!

@KevinPerez-fd9xq 3 жыл бұрын

So much info!!!! My brain is trying to keep up. I have to rewatch this again !!!!!

@DividendGrowthInvesting 3 жыл бұрын

Once you understand it you will have that lightbulb effect.

@KevinPerez-fd9xq 3 жыл бұрын

@@DividendGrowthInvesting ……💡got it 😂

@griffinwolfe9093 3 жыл бұрын

Great video as always!

@DividendGrowthInvesting 3 жыл бұрын

Thank you!!

@MrAsianman987 3 жыл бұрын

Nice. Puerto Rico has an incentive called act 22 (now 60) called the individual investors act. Under the act you pay 0% taxes on long and short term capital gains, dividends, and interest. It's something I have been considering for some time.

@DividendGrowthInvesting 3 жыл бұрын

wow! Not bad at all!

@MrAsianman987 3 жыл бұрын

@@DividendGrowthInvesting Yeah there are some conditions. You have to buy a house within two years of qualifying and there is an annual fee of 10k that you get to donate to a charity of your choice. I think its worth it though, it's the only place you can pay 0% capital gains tax and still be a US citizen. I think the USVI has a similar structure, but I'm not 100% on that.

@delbomb3131 3 жыл бұрын

Yep, lots of chatter about wealthy people moving there for this reason

@philb6079 2 жыл бұрын

Great video. This has really got me thinking. I'm 41 and hope to retire at 55. I have a long ways to go but this will really help me out.

@DividendGrowthInvesting 2 жыл бұрын

So glad you got value out of the video!!

@RJ-pt8kq 3 жыл бұрын

You ROCK!

@DividendGrowthInvesting 3 жыл бұрын

:) Thanks

@richardm.441 3 жыл бұрын

This is the best video about investing that I have seen in a long time. I am paying lots in taxes working, and now I find out that I can retire, and pay no taxes, and still have more than enough to meet my needs.

@DividendGrowthInvesting 3 жыл бұрын

It changes your perspective on life when you understand this!

@nickdoesdgi1095 3 жыл бұрын

Great video as always. Love me some passive dividend income!

@DividendGrowthInvesting 3 жыл бұрын

Thank you!!

@TazThaManiac 3 жыл бұрын

Damn, lots of good info but imma have to come back later on when I'm able to really put this into practice

@ravenous650r3 3 жыл бұрын

Can you make a video going over MLP and C Corp stocks/dividends. I don’t know too much about these differences (if there are more types as well) and the taxes differentiate on these as well. Thank you for this awesome video as well!

@DividendGrowthInvesting 3 жыл бұрын

This is a great recommendation! Thank you!

@lloydlocke4763 3 жыл бұрын

This really helped , thanks for explaining this strategy. Some of the best and most reliable payers are non qualified.

@DividendGrowthInvesting 3 жыл бұрын

Thanks for watching!! And at the most favorable tax rate :)

@ElCatrinMuerto 3 жыл бұрын

great video! I did all the same calculations you did on this video just a few days ago when I was looking into the tax implications. These are the types of things everyone should know. and yes this was a sexy topic. 🤣

@DividendGrowthInvesting 3 жыл бұрын

lol!! yes!!!

@jmr2594 3 жыл бұрын

How is it possible you don't have more subscribers I think your videos are better then half the guys on You tube.

@DividendGrowthInvesting 3 жыл бұрын

I appreciate you saying this!! Work in progress I guess :)

@gonzalovirrueta5642 3 жыл бұрын

Hey Jake love the video. Thank you so much, this is very helpful. I was wondering how I can use the calculator with ETFs. Let's say I am only doing ETFs in my DGI portfolio. I know that some ETFs have REITS in their portfolio and some don't. If you could do a video like this but with ETFs, I would appreciate it! Thanks again.

@DividendGrowthInvesting 3 жыл бұрын

Great recommendation and very good point.

@sea_hous 3 жыл бұрын

That capital gains sandwich bite. LOL! Love me some Ron Swan.

@DividendGrowthInvesting 3 жыл бұрын

Lol!!!

@bill__ 3 жыл бұрын

Your line at the end resonated with me. “If you are excited about this kind of stuff...” made me realize how many people aren’t excited by this kind of stuff. I don’t understand those people lol

@DividendGrowthInvesting 3 жыл бұрын

Lol I am right there with you :)

@parthivpatel3483 3 жыл бұрын

I liked the human touch at the end with vintage video clips 'Thanks'

@DividendGrowthInvesting 3 жыл бұрын

Thanks for watching partner :D

@MrAkidoa28 3 жыл бұрын

Hi Jake, this really put my target allocation set-up in better structure. Thanks buddy.. Team F.I.R.E Voyager out.

@DividendGrowthInvesting 3 жыл бұрын

So glad it was helpful!!

@sea_hous 3 жыл бұрын

This was very helpful. I'm going to get married tomorrow and I'm side eyeing my REITS. I'm a little REIT nervous now but I think I just need to geek out more. Very cool about the REIT vs standard deduction. Love it.

@DividendGrowthInvesting 3 жыл бұрын

I love nerding out on this kind of stuff!

@youngyi7800 2 жыл бұрын

Awesome contents!!! Q: Those funds are in your 401Ks or your brokerage accounts? I am worried about 10% penalty if it’s 401k or IRA account when ONLY dividends withdrawal is made BEFORE 59 1/2. Our retirement funds are all tied up in 401Ks/ IRAs and not sure if we can do the similar calculation you did in your video..

@ZSharkPH 2 жыл бұрын

Great video.. thanks for taking the time to make it. Im curious why you dont invest more heavy into Etfs like jepi, schd and divo??

@DividendGrowthInvesting 2 жыл бұрын

In my newer videos, I talk more about these ETFs :)

@TrainedOldSkool 3 жыл бұрын

So if I understand right as a single filer I could choose to have reits in a taxable account and not pay taxes on the dividends as long as I don't make more than 12K on them which is the standard deduction for single filers.

@DividendGrowthInvesting 3 жыл бұрын

yup :D Assuming you don't go over 40K in income.

@fabiGBOtown 2 жыл бұрын

So this is why people keep dividend yield on taxable accounts... awesome video

@DividendGrowthInvesting 2 жыл бұрын

Thank you!!!

@dustindodge5974 3 жыл бұрын

One of your best videos yet! Now couple this with a Roth account and really stick it to the tax man lol

@DividendGrowthInvesting 3 жыл бұрын

Thanks Dustin!! Lol exactly!!

@ctwhaley 3 жыл бұрын

I might have missed the link for the DGI Dividend Reinvestment Calculator spreadsheet. Which like will allow me to access the spreadsheet? Thanks and great content!

@DividendGrowthInvesting 3 жыл бұрын

You can access the link in the pinned comment of this video.

@xyz1148 2 жыл бұрын

where do I put section 199A dividends and non dividend distributions on the 1040 tax calculator?... and are they considered qualified? thanks... great video.

@thecapone45 3 жыл бұрын

Great video man. This got me excited.

@DividendGrowthInvesting 3 жыл бұрын

So glad you enjoyed it!

@fancypharmacist 3 жыл бұрын

Thaaaaank youuuuuu

@DividendGrowthInvesting 3 жыл бұрын

Thanks for watching :)

@robbee6953 3 жыл бұрын

Awesome vid! What would happen if you owned MLPS?? could you add more tax free income?? THANKS!

@DividendGrowthInvesting 3 жыл бұрын

Most MLPs are taxed at the qualified rate.

@DMTT100 2 ай бұрын

Thank you for videos. Does qualified mean stocks held for at least a year before withdrawing income? Does IRS cite any reasons for taxing real estate differently? Is it arbitrary?

@DividendGrowthInvesting 2 ай бұрын

Qualified means that it’s a non ordinary source of income. It’s viewed more favorably by the government. Real estate is its own thing but long and short term tax rates still apply.

@mybook1234 3 жыл бұрын

Awesome video! Assuming our mortgage interest and property tax deduction would also help to reduce that $80,000 income level?

@DividendGrowthInvesting 3 жыл бұрын

This would depend on whether or not you took the standard deduction or the itemized deduction.

@mybook1234 3 жыл бұрын

Right we have been doing itemized deductions so looks like we can then!

@fabiGBOtown 2 жыл бұрын

Ive watched like 50 videos if yours and this is the one that convinced me and I am now a subscriber. You have broken me diwn into a dividend investor. Im opening a m1 finance account with your link. Have you shared your portfolio or do you keep it a secret?

@DividendGrowthInvesting 2 жыл бұрын

hey there!!! So glad you enjoy the channel!! In my recent videos, I have a link to my updated portfolio. m1finance.8bxp97.net/Vyj1na

@LuisGonzalez-jx2qy 3 жыл бұрын

When is the illegally version of the video coming out? Jokes aside, great video! :)

@DividendGrowthInvesting 3 жыл бұрын

You would have to become a hedge fund manager to access that video.

@thomaswinter739 3 жыл бұрын

@@DividendGrowthInvesting 😆😂

@BeginnersTech314 3 жыл бұрын

You see now I got to figure this out with including rental properties because I have some rental properties but I don't really do dividend stocks I just do straight up growth stocks so how does that change things

@DividendGrowthInvesting 3 жыл бұрын

That is a great question! I would suggest playing with the 1040 tax calculator. With your Schedule E (Real Estate), you only pay taxes on what you net after expenses. The tax on the growth stocks would depend on how long you held them (short-term vs long-term capital gains tax). The calculator is a great way to simulate different situations based on the 2020 tax laws.

@BenTheBadger 3 жыл бұрын

Hey Jake, just wondering how to go about getting your dividend calculator spreadsheet. Have seen you mention its for free just wanted to know how to download or access it.

@DividendGrowthInvesting 3 жыл бұрын

Click on the link in the pinned comment. Click File in the top and click "make copy" and save it to your computer or google sheets.

@NBA_neil 2 жыл бұрын

Great video, I watched it 3 times but I have a question. Does income from a job interfere with your capital gains taxes? For example, as a single filer, if I made $40k from a job and $40k in qualified dividends would I owe taxes on the dividend income even though I’m below the threshold? Because combined it’s $80k which would put me over the threshold IF both of these incomes are combined and not separate. I’m not sure if they are combined

@DividendGrowthInvesting 2 жыл бұрын

You would count both combined putting you at 80k and yea you would pay taxes on the dividends. Use the website in the description. It can help you simulate it

@danstevens64 6 ай бұрын

Can you expand on this when it comes to Roth IRA Contributions? I feel like there is a life hack somewhere in there.. I say that because contributions from a rothiary can be withdrawn at any time. If you convert The assets within one to income-generating assets, Wouldn't the income produced/ withdrawn First be deducted from the contributions category?

@jordibruggeman6302 3 жыл бұрын

Jake what is your opinion on Danaher? I have a 20+ year time horizon and I am supper bullish on the company after analysing it thorougly.

@DividendGrowthInvesting 3 жыл бұрын

I personally like MDT and SYK for their growth rate and current yield. These are my favorite growth Healthcare stocks.

@lennyS6969 2 жыл бұрын

So if your dividends make above the 80+ standard deduction, do you only pay taxes on the amount above that or do you pay taxes on the whole amount of dividend income

@kevinwillard4443 2 жыл бұрын

From my research, it looks like long term capital gains are treated with the same manner as qualified dividends that is in 2021, if your total income was $80,800 from long term capital gains you would pay no federal taxes. I do realize the disadvantage is you are selling your shares, the money doesn't replenish as dividends do, If you aren't retired it might be good to hit that $0 tax mark with long term capital gains each year if you are below the $80K+ income limit. If I'm wrong here, please correct me.

@JackCasablanca-painter 3 жыл бұрын

Jake, just a guess but is it possible that the reason very few people discuss this stock is that it's overvalued in a time when everyone is focused on studying undervalued stocks? Heck, most people are too chicken shit to even get near the markets now, but the few with the cajones to do so are looking at stocks in a dip, and OHI is quite high compared to its own history.

@mikegolding6476 3 жыл бұрын

I'm a CEF fan But have a hard time understanding how to use this calc page Looking at the distributions and how they're broken up, can you help me walk thru this Exaggerated numbers from a distribution 50,900 non dividend distribution 20,100 section 199a dividend 15,600 qualified dividend 13,400 non qualified dividend Anyone help me get these numbers into that calc page?

@taima3209 3 жыл бұрын

Your video is great ! I have a question: Can I deduct my dividend income if I contribute some of it to IRA account ? ( assume that I retire early and do not use all dividend income) Thank you.

@DividendGrowthInvesting 3 жыл бұрын

Yes, by investing into a traditional IRA, you would reduce your taxable income on your dividends (assuming you meet the normal requirements, e.g. if you file jointly and make less than $208,000 in 2020/2021). You can run the simulation on the tax calculator from the description below. You would enter the IRA deduction under the adjusted gross income section at the bottom.

@taima3209 3 жыл бұрын

@@DividendGrowthInvesting Thanks Jake.

@Drunken_Pil0t 3 жыл бұрын

Thank you for this🙏! I've been putting off on opening a ROTH ira because i can only contribute on "earned" income..which I have none at the moment. ever since the pandemic, I've been unemployed and that doesn't qualify for a roth. I'm thinking to just skip the roth and go fully with a dividend portfolio . I've seen another video about, if you invest in a roth until 59 or have a brokerage account until 59, at the end, it'll be the same, no tax...depending on your tax bracket...hmmmm got me thinking 🤔🤔

@DividendGrowthInvesting 3 жыл бұрын

I hope everything works out for you. My wife and I were also impacted by the pandemic. Things are slowly getting better. This could be something that may work for you.

@Drunken_Pil0t 3 жыл бұрын

@@DividendGrowthInvesting once you have reached FIRE in 8yrs , are you still able to contribute to your Roth?

@DividendGrowthInvesting 3 жыл бұрын

@@Drunken_Pil0t Yup :)

@stevehall8227 3 жыл бұрын

Id recommend filling and investing your roth up first, any year that you can, then a hsa, then having a regular trading account.

@Missyou-. 2 жыл бұрын

How much do you need to invest on average to get the $80,000 tax free dividends?

@TheTazz2you 3 жыл бұрын

What if my income is still and a retirement pension all 1099r forms 2 incomes is that the same ????

@DividendGrowthInvesting 3 жыл бұрын

You can u se the tax calculator to run that scenario.

@opt4living 3 жыл бұрын

Great concept, but gets totally thrown off with the filing for Social Security and leaves no room for adjustments to pretax accounts before the provisional income tax bomb. Thoughts?

@DividendGrowthInvesting 3 жыл бұрын

You would have to run the numbers in the sheet for your specific scenario. Also when looking at SS, this could be different depending on your age and then which account you hold your investments.

@opt4living 3 жыл бұрын

@@DividendGrowthInvesting Roth as much as you can;)

@jimmywatermelon357 3 жыл бұрын

So it’s best you put your REITS in the ROTH IRA so you pay $0 tax on the dividends right? Since they are taxed at higher rates.

@DividendGrowthInvesting 3 жыл бұрын

Ideally yes you would want to put these in a tax sheltered account. However, then you would not be able to access the money until you are 59.5. With the example I shared in the video, you would be able to access the dividends before you are 59.5.

@tylerb325 3 жыл бұрын

Are dividends from the aristocrats we know (PG, ABBV, WM, HD, MCD, PEP, KO, etc..) mostly or all qualified/ordinary?

@wasbii22 3 жыл бұрын

They are qualified

@JohnCarrFitness 2 жыл бұрын

BTW I worked with (Ron Swanson) aka Nick Offerman. He's a great man and an expert wood worker in real life! He trained a ton of wood workers here in California. He's basically the real Ron Swanson in actual life lol

@DividendGrowthInvesting 2 жыл бұрын

lol omg! I bet that was an experience meeting him!

@kbro7484 Жыл бұрын

What did I miss. How are you planning on retiring I'm 8 years with only 141k currently

@supermat55 3 жыл бұрын

Do you invest differently in your Traditional vs Roth IRAs?

@DividendGrowthInvesting 3 жыл бұрын

I have a traditional IRA (from rolling over my 401k) and a Roth IRA. In my traditional IRA I just have the total US stock market VTI. In my Roth IRA I have VTI, VGT, VXUS, VNQ, and VYM.

@race29dub 3 жыл бұрын

What if you want a side hustle in early retirement? Obviously that income falls under the vague "Your Income" on the graphic. Does interest and other capital gains income get counted too before you reach the $80800 threshold? And then does the 0% tax rate apply to only the dividend income that falls below the threshold?

@DividendGrowthInvesting 3 жыл бұрын

all income whether dividends, side hustles, or interest would be counted toward your income limit in this example.

@race29dub 3 жыл бұрын

@@DividendGrowthInvesting so if a couple earns $50000 in earned income and $50000 in dividend income, the first $30800 of dividend income is not taxed and the remainder is taxed at 15% currently?

@DividendGrowthInvesting 3 жыл бұрын

@@race29dub You can run this in the link I share in the description. You can add the earned income in the income section as well as the dividends and it will show you how much you would pay based on 2020.

@sparshparimoo 3 жыл бұрын

What about social security income? Doesn’t that count towards the 80K?

@DividendGrowthInvesting 3 жыл бұрын

You would then pay taxes on the 10K as ordinary income. You can also add this to the calculator under the income section as "wages" (above where we entered the dividend income).

@hallpaintandbody7717 3 жыл бұрын

Wow, so being single cut these numbers in half-ish. Still more than I make now, working full-time. Using my unqualified dividends to help the qualified grow faster. Bro, your trying to get me married?? 😆

@DividendGrowthInvesting 3 жыл бұрын

I got 99 problems but a low standard deduction ain’t one of them.

@hallpaintandbody7717 3 жыл бұрын

@@DividendGrowthInvesting lol

@ghant. 11 ай бұрын

Hi brother, You may have an idea as you lived in Germany. my question is if i am an American living and working overseas how would my dividend tax will be calculated ? I know when i livind and worked previously in Dubai, i only paid taxes on any amount over 90k a year, i wonder how dividends would be, any idea?

@DividendGrowthInvesting 11 ай бұрын

You would pay normal US tax on them. Your income in Dubai would be exempt and you would only pay tax on the dividend income you earned in the US according to your tax bracket

@ghant. 11 ай бұрын

@@DividendGrowthInvesting you are the best 🙏 Thank you

@ghant. 11 ай бұрын

@@DividendGrowthInvesting just to clarify, if my Dubai income is exempt , does it mean if i make less than 44k in qualified dividend as a single guy then i don't pay tax on that either?

@LSDDDP 3 жыл бұрын

Is your M1 cash flow pie roth ira or taxable account? Since you mentioned tax can I assuming it is taxable account right?

@DividendGrowthInvesting 3 жыл бұрын

This is in a taxable account. I also have a Roth IRA, but that is really something happening in the background. We will retire off of our taxable account.

@waterdd1 3 жыл бұрын

Can you explain why you don’t hold your REITs in your Roth account? ...Seems like the best place to hold them; they won’t get taxed at the ordinary income rate (they won’t get taxed at all ;) )

@thantthein5965 2 жыл бұрын

Better buy growth stock and then sell them when retire. No need to pay long term capital gains tax.

@austinthomas105 3 жыл бұрын

You have several accounts, which ones are taxable accounts and which are tax advantaged accounts?

@DividendGrowthInvesting 3 жыл бұрын

My M1 portfolio is in a taxable account. I also have a Roth IRA and 401K.

@lukeschepperley8355 2 жыл бұрын

What about roc with reits?

@DividendGrowthInvesting 2 жыл бұрын

Very good point. ROC is a big component of REITs that I discuss in other REIT videos.

@reachingforamillion4680 3 жыл бұрын

If your retired and you make 6 thousand in REIT dividends. Since there taxed at regular income can you use that 6 thousand to max out a Roth IRA?

@DividendGrowthInvesting 3 жыл бұрын

Yes, but with a Roth IRA you are using after tax dollars. If you wanted to offset the income, you would want to use pre tax or a Traditional IRA.

@biggieb291 3 жыл бұрын

Just so I am clear, your income from a rental is considered passive and is taxed the same as a qualified dividend?

@DividendGrowthInvesting 3 жыл бұрын

Depends but in most cases it qualifies as QBI.

@realfinalsay 3 жыл бұрын

Hey how can I summit my portfolio for a review?

@DividendGrowthInvesting 3 жыл бұрын

Of course! shoot me over an email at divgrowthinvesting@gmail.com. Any additional information you add will help me tailor it more to your situation - obviously just my opinion :)

@tylerewell9658 3 жыл бұрын

Does the 80k limit only count your dividend income or all income?

@DividendGrowthInvesting 3 жыл бұрын

The 80K is only looking at the capital gains. If you have additional income (e.g. W2), you would need to pay taxes on any extra income and there are different tax brackets for that. I would suggest playing with the 1040 tax calculator if you have additional income that you are unsure how this would be taxed. For example, if you made x amount in dividend income, but also had a day job or a side hustle.

@shazam2323 3 жыл бұрын

I have alot of dividend payers, how do I find out which ones are qualified?

@DividendGrowthInvesting 3 жыл бұрын

You can go to dividend.com and go to the payout at the bottom when looking up a stock, you will see if it is qualified or non-qualified. ETFs can be a mixture of both.

@thomaswinter739 3 жыл бұрын

Bro, your killing it with these jokes. Can't read your comments without crying! Lol

@DividendGrowthInvesting 3 жыл бұрын

lol!!!

@NewlyNappy 3 жыл бұрын

Wait a minute! So you’re telling me that I can get tax free dividend income in retirement without my dividend investments being held in a tax advantages account??? 🤯😱🤯

@DividendGrowthInvesting 3 жыл бұрын

Exactly!! It changes my mindset entirely when it comes to investment accounts!!

@NetGhost420 3 жыл бұрын

I hit that 800th like breh.

@DividendGrowthInvesting 3 жыл бұрын

lol yessss!!!

@shstovall 10 ай бұрын

Hmm...I thought that ordinary dividends are taxed at the same rate as short-term capital gains?

@DividendGrowthInvesting 10 ай бұрын

Yup

@BTBLive 8 ай бұрын

If I understand correctly only if your income is over the 109k. So if MAGI (AGI?) is under 80k (MFJ) Qualified divs are not taxed up until that amount then you pay taxes on the overage. I may be wrong but that is how I see it.

@shstovall 8 ай бұрын

No idea...all I know is that hardly any of my dividends are qualified.

@derkong7114 3 жыл бұрын

Real inflation is north of 10% and headed much higher...

@DividendGrowthInvesting 3 жыл бұрын

Kinda scary.. Especially in certain areas of the market.

@OneNationUnderGod. 3 жыл бұрын

Unfortunately the tax code is going to have some big changes in the next year or two and capital gains tax is one that's already been discussed that is going to be taxed at a higher rate. Current administration wants to hit wallstreet with higher capital gains taxes but it's the little guy that will be hurt the most.

@DividendGrowthInvesting 3 жыл бұрын

It is going to be interesting how things get updated. That is the challenging part about planning in the future when it comes to your taxes. Regardless if blue or red, the increases have been around $400 - $800. It is possible the standard deduction goes back down in the future. The key thing here I guess is to be flexible and nimble to react to changes that come.

@OneNationUnderGod. 3 жыл бұрын

@@DividendGrowthInvesting I'm mostly hoping they can't come to agreement on changes in time to go into effect until after 2121 tax year. We just sold an investment property at the start of this year and the last thing I want is to pay even more taxes than I'm already looking at.

@DividendGrowthInvesting 3 жыл бұрын

@@OneNationUnderGod. If they did change it in 2021, you could do other things to reduce your taxable income (e.g. 401K, Traditional IRA, HSA etc..) Best case is they don't change it :)

@OneNationUnderGod. 3 жыл бұрын

@@DividendGrowthInvesting definitely best case is it stays the same for one more year. I'm definitely gonna fully fund my traditional IRA this year to shelter some income. I guess it's a good problem to have but I'm looking at +$70k in capital gains this year, uncle sam is gonna love me.

@JohnCarrFitness 2 жыл бұрын

If only inflation was still 2.5 percent ugh....

@DividendGrowthInvesting 2 жыл бұрын

ya :(