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
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.
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.
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.
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 👍
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!
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 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.
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
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.
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!
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?
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.
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.
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.
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.
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. 🤣
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..
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!
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
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
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
where do I put section 199A dividends and non dividend distributions on the 1040 tax calculator?... and are they considered qualified? thanks... great video.
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.
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.
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?? 😆
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?
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?
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??? 🤯😱🤯
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.
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?
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
@@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?
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.
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?
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.
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.
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
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.
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 ;) )
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.
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?
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 🤔🤔
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.
I under you clarified everything but saying no one knows what taxes will do and be, but your video is slightly misleading. You should know that the Tax Cuts and Jobs Act aka Trump Tax Cuts, are scheduled to sunset Dec 31, 2025, meaning the Standard Deduction you are quoting for 2027 will be 1/2 (more or less) of what you’re showing. Again, Congress can do anything between now and then. If they do cut you better be able to itemize to get the zero tax you are showing.
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.
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).
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 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?
@@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.
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.
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
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.
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.
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.
@@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.
@@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 :)
@@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.
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 :)
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
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.
Who are these people that make +$80,000 a year in dividends? Geezus.
I'd be set at $24,000 a year.
@@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.
@@Dave-yw2wc If I was in your position I'd move to a place where the dollar goes further and just be done.
the calculator doesnt make sense, how do i know my price per share when my portfolio isn't just 1 stock?
I am one of the few people who actually likes talking about taxes and understanding how it is done.
You are in good company!
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.
This is our situation and we paid zero taxes in 2020, our first full year of early retirement. WOO HOO!!
That is so exciting!! It sounds like you are living the dream!
@@DividendGrowthInvesting We are! We are living a nomadic lifestyle and driving around Europe for a few years.
Can I do this having retirement income 1099r
@@TheTazz2you , Up to a point. Once your 1099-R income gets over high enough your qualified dividends and capital gains begin to get taxed.
I can't believe I just watched, and payed attention to, a UA-cam video featuring the 1040 form. What is my life coming to?!?
full on adulting :)
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+++
Im so glad that the video was helpful!!
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.
It changes your perspective on life when you understand this!
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 👍
Awesome content! I love how your showing all aspects of the financial journey from just starting out to relying on the portfolio for income!
Thank you!!
You have such a high value channel. Thank you for being so detailed!
Thank you!!!!
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!
So glad to hear it was helpful!!
good way to end the weekend !
You the man Dejan!!!
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.
wow! Not bad at all!
@@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.
Yep, lots of chatter about wealthy people moving there for this reason
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
Lol I am right there with you :)
These videos are the best part of my Sunday nights!
Hey Sebastian! I am so glad you are enjoying the channel!
Wow I didn’t realize the limits would be this high. Thanks for sharing this info Jake.
yeah!! Thanks for watching!
So much info!!!! My brain is trying to keep up.
I have to rewatch this again !!!!!
Once you understand it you will have that lightbulb effect.
@@DividendGrowthInvesting ……💡got it 😂
Great video Jake. I'm not currently dividend investing, but your information is always valuable!
Thanks Thomas! This could also work the same for growth stocks :)
How is it possible you don't have more subscribers I think your videos are better then half the guys on You tube.
I appreciate you saying this!! Work in progress I guess :)
Love the Ron Swanson/Parks and Rec clip. Keep up the great work! - Daniel in HTX
Lol the best!!! Cheers from Austin!
Fantastic video. I had no clue about some of this!
Blows the mind :) Glad it was helpful!
I've been waiting for your post this week. Perfect timing since I was looking for it. Love the channel.
Hey Matthew!! So glad you are enjoying the channel!
So this is why people keep dividend yield on taxable accounts... awesome video
Thank you!!!
I too love nerding this stuff. Thank you.
You are in good company!!
See now this is how I learn and understand things thanks for the great explanation
I'm so glad that the video was helpful!
So good! I'm definitely going to save and watch again to catch more details. Thanks! I love tax efficiency!
Yes!!!
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.
So glad you got value out of the video!!
That was fantastic! Thank you so much for your easy to understand information!!!
You are very helpful. Thanks. Keep up the good work
Thanks for watching!!
That capital gains sandwich bite. LOL! Love me some Ron Swan.
Lol!!!
Thanks, your video was very helpful
So glad it was helpful!! Thanks for watching!
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.
yup :D Assuming you don't go over 40K in income.
Thanks for the info!
Thanks Jake. Very valuable info as always.
Thanks for watching!!
this really helped me look into how to manage my future more efficiently , thanks! so much value in this video.
So glad this was helpful! I hope you have a great week Revlis!
@@DividendGrowthInvesting thank you! You as well Jake!
Awesome stuff sir. I learned a ton from you today. Greatly appreciated.
Thanks for watching!!
I liked the human touch at the end with vintage video clips 'Thanks'
Thanks for watching partner :D
Great video very helpful!!
Thanks for watching Nick!
This really helped , thanks for explaining this strategy. Some of the best and most reliable payers are non qualified.
Thanks for watching!! And at the most favorable tax rate :)
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!
This is a great recommendation! Thank you!
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?
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.
Great video as always!
Thank you!!
Great info thanks!
Thanks for watching!
One of your best videos yet!
Now couple this with a Roth account and really stick it to the tax man lol
Thanks Dustin!! Lol exactly!!
Great video as always. Love me some passive dividend income!
Thank you!!
Hi Jake, this really put my target allocation set-up in better structure. Thanks buddy.. Team F.I.R.E Voyager out.
So glad it was helpful!!
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??
In my newer videos, I talk more about these ETFs :)
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.
How much do you need to invest on average to get the $80,000 tax free dividends?
You ROCK!
:) Thanks
When is the illegally version of the video coming out? Jokes aside, great video! :)
You would have to become a hedge fund manager to access that video.
@@DividendGrowthInvesting 😆😂
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.
I love nerding out on this kind of stuff!
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.
Great recommendation and very good point.
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. 🤣
lol!! yes!!!
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..
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.
I personally like MDT and SYK for their growth rate and current yield. These are my favorite growth Healthcare stocks.
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!
You can access the link in the pinned comment of this video.
Damn, lots of good info but imma have to come back later on when I'm able to really put this into practice
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
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
Awesome vid! What would happen if you owned MLPS?? could you add more tax free income?? THANKS!
Most MLPs are taxed at the qualified rate.
Awesome video! Assuming our mortgage interest and property tax deduction would also help to reduce that $80,000 income level?
This would depend on whether or not you took the standard deduction or the itemized deduction.
Right we have been doing itemized deductions so looks like we can then!
Are dividends from the aristocrats we know (PG, ABBV, WM, HD, MCD, PEP, KO, etc..) mostly or all qualified/ordinary?
They are qualified
If only inflation was still 2.5 percent ugh....
ya :(
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
where do I put section 199A dividends and non dividend distributions on the 1040 tax calculator?... and are they considered qualified? thanks... great video.
What did I miss. How are you planning on retiring I'm 8 years with only 141k currently
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.
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.
@@DividendGrowthInvesting Thanks Jake.
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?? 😆
I got 99 problems but a low standard deduction ain’t one of them.
@@DividendGrowthInvesting lol
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?
hey there!!! So glad you enjoy the channel!! In my recent videos, I have a link to my updated portfolio. m1finance.8bxp97.net/Vyj1na
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?
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??? 🤯😱🤯
Exactly!! It changes my mindset entirely when it comes to investment accounts!!
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.
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.
Better buy growth stock and then sell them when retire. No need to pay long term capital gains tax.
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?
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
@@DividendGrowthInvesting you are the best 🙏 Thank you
@@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?
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.
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.
You have several accounts, which ones are taxable accounts and which are tax advantaged accounts?
My M1 portfolio is in a taxable account. I also have a Roth IRA and 401K.
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?
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.
@@DividendGrowthInvesting Roth as much as you can;)
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.
Real inflation is north of 10% and headed much higher...
Kinda scary.. Especially in certain areas of the market.
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
lol omg! I bet that was an experience meeting him!
Is your M1 cash flow pie roth ira or taxable account? Since you mentioned tax can I assuming it is taxable account right?
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.
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 ;) )
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?
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.
I have alot of dividend payers, how do I find out which ones are qualified?
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.
Roth IRA and Roth 401k zero taxes
The best and easiest way to go about it if you plan to retire after the age of 59.5.
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?
What if my income is still and a retirement pension all 1099r forms 2 incomes is that the same ????
You can u se the tax calculator to run that scenario.
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 🤔🤔
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.
@@DividendGrowthInvesting once you have reached FIRE in 8yrs , are you still able to contribute to your Roth?
@@Drunken_Pil0t Yup :)
Id recommend filling and investing your roth up first, any year that you can, then a hsa, then having a regular trading account.
I under you clarified everything but saying no one knows what taxes will do and be, but your video is slightly misleading. You should know that the Tax Cuts and Jobs Act aka Trump Tax Cuts, are scheduled to sunset Dec 31, 2025, meaning the Standard Deduction you are quoting for 2027 will be 1/2 (more or less) of what you’re showing. Again, Congress can do anything between now and then. If they do cut you better be able to itemize to get the zero tax you are showing.
Does the 80k limit only count your dividend income or all income?
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.
Bro, your killing it with these jokes. Can't read your comments without crying! Lol
lol!!!
What about social security income? Doesn’t that count towards the 80K?
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).
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?
all income whether dividends, side hustles, or interest would be counted toward your income limit in this example.
@@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?
@@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.
Do you invest differently in your Traditional vs Roth IRAs?
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.
Just so I am clear, your income from a rental is considered passive and is taxed the same as a qualified dividend?
Depends but in most cases it qualifies as QBI.
What about roc with reits?
Very good point. ROC is a big component of REITs that I discuss in other REIT videos.
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
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.
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.
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.
@@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.
@@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 :)
@@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.
Thaaaaank youuuuuu
Thanks for watching :)
Hey how can I summit my portfolio for a review?
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 :)
I hit that 800th like breh.
lol yessss!!!
Sounds like your talking about cg tax. But the title of the vid is about dividends. Capital gains and dividend are not the same thing.
Dividends are taxed as long-term capital gains.