Why Are Dividends Taxed Twice?

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Tip 1 - What is the double taxation of dividends?

Published: 9 years, 4 month(s) ago | Submitted by Thel Villarta | permalink

After all is said and done, companies that have made a profit can do one of two things with the excess cash. They can (1) take the money and reinvest it to earn even more money, or (2) take the excess funds and divide them among the company's owners, the shareholders, in the form of a dividend.
Tags: double taxing,shareholder,dividend,irs,capital gain,corporate tax,dividend policy,dividend tax,dividends,income investing,investment tax,personal tax,wm-investments,wm-high net worth tax strategy

For further reading: http://www.investopedia.com/ask/answers/03/102203.asp ^[1]

Tip 2 - Double Taxation Definition | Investopedia

Published: 9 years, 4 month(s) ago | Submitted by John Schenk | permalink

A taxation principle referring to income taxes that are paid twice on the same source of earned income. Double taxation occurs because corporations are considered separate legal entities from their shareholders. As such, corporations pay taxes on their annual earnings, just as individuals do.
Tags: investor relations,corporate tax,dividend tax,income tax,investment tax,personal tax,wm-investments,wm-high net worth tax strategy,double taxation,dictionary,glossary,education,investment,tutorials,investing,invest,investor,stocks,quotes,analysis,beginner,finance,financial,market,news,401k,ira,personal,definitions,terms,mutual funds,ipo,options,nasdaq,trader,trading

For further reading: http://www.investopedia.com/terms/d/double_taxation.asp ^[2]

Tip 3 - A Beginner's Guide to How Dividends Work

Published: 9 years, 4 month(s) ago | Submitted by thomas coyle | permalink

There is a double taxation problem with dividends. In fact, the United States has one of the highest taxes on dividends in the entire world because we don't allow corporations to deduct dividends paid out to owners from corporate income tax rates.
Tags: dividends,dividend investing,dividend stocks,dividend yield,dividend policy,stock dividends,property dividends,liquidating dividends

For further reading: http://beginnersinvest.about.com/od/dividendsdrips1/ss/dividends-and-dividend-investing-101_6.htm ^[3]

Tip 4 - Tax Tricks: Is Corporate Income Taxed Twice?

Published: 9 years, 4 month(s) ago | Submitted by jdmar 71n | permalink

Conservatives claim that income from corporate dividends is "taxed twice" -- first when the corporation pays its taxes (if it does pay taxes), and then when the recipient of dividends pays t
Tags: tax, tricks:, is, corporate, income, taxed, twice?, business

For further reading: http://www.huffingtonpost.com/dave-johnson/tax-tricks-is-corporate-i_b_545527.html ^[4]