How this number is made
Dividend income is the portfolio times the yield. The tax is whatever rate applies to those dividends, which may be ordinary or qualified. This page does not decide which. A yield can be cut. The cash is not the total return, because the price can fall by more than the dividend.
- Yield is the annual dividend divided by the current price, for the whole portfolio if you have already averaged it.
- Use 0% tax for an account that does not tax the dividend, such as a Roth.
Formula
Cash = portfolio × yield. After tax = cash × (1 − tax rate).
Worked example
With the figures already in the form, dividends per year is $5,000.
Questions
Is a 15% tax always right?
No. Qualified dividends use the long-term brackets, including 0% and 20%, and ordinary dividends use ordinary rates. Type the one that applies.
Does this reinvest?
No. Reinvestment is the dividend-reinvestment page. This is cash you could spend.