Dividends and Taxes - Fidelity (2024)

FAQs

How do I find out how much dividends I paid on Fidelity? ›

Once you have logged into your Fidelity account, navigate to the 'Accounts & Trade' section and select the account for which you want to check dividends. Look for the 'Statements & Records' option to review your recent account statements.

How dividends are taxed depends on your income, filing status and whether the dividend is qualified or nonqualified. Qualified dividends are taxed at 0%, 15% or 20% depending on taxable income and filing status. Nonqualified dividends are taxed as income at rates up to 37%.

These dividends are federally taxable at the capital gains rate, which depends on the investor's modified adjusted gross income (AGI) and taxable income (the current rates are 0%, 15%, 18.8%, and 23.8%).

A dividend is a payment made by a company to share its profits with its shareholders. If your company stock pays a dividend, it goes into your Fidelity Account^® as cash by default. But you could use that money to purchase more shares of company stock or other investments to help keep it invested and working for you.

Through the National Electronic Clearing Service (NECS), also called the ECS. By mailing the dividend warrants to the physical address of the investor.

One way to reinvest dividends in Fidelity is by signing up for a Dividend Reinvestment Program (DRIP), which automatically reinvests your dividend payments back into the same investment, helping you grow your portfolio over time.

Keep in mind: You can't avoid taxes by reinvesting your dividends. Dividends are taxable income whether they're received into your account or invested back into the company.

There are times when it makes better sense to take the cash instead of reinvesting dividends. These include when you are at or close to retirement and you need the money; when the stock or fund isn't performing well; when you want to diversify your portfolio; and when reinvesting unbalances your portfolio.

Tax on dividends is calculated pretty much the same way as tax on any other income. The biggest difference is the tax rates - instead of the usual 20%, 40%, 45% (depending on your tax band), you'll be taxed at 8.75%, 33.75%, and 39.35%.

How much dividends do you need to report on taxes? ›

If you receive over $1,500 of taxable ordinary dividends, you must report these dividends on Schedule B (Form 1040), Interest and Ordinary Dividends. If you receive dividends in significant amounts, you may be subject to the Net Investment Income Tax (NIIT) and may have to pay estimated tax to avoid a penalty.

As a result, eligible dividends are taxed at a lower personal income tax rate (combined federal and provincial or territorial) to recognize that eligible dividends are considered to be paid from corporate income taxed at full corporate income tax rates.

To begin, once you are logged into your Fidelity account, navigate to the 'Accounts & Trade' section, where you will find the 'Activity & Orders' tab. Click on this tab to view a comprehensive breakdown of all your recent transactions, including dividend payments.

IRS regulations require Fidelity to withhold federal income tax at the rate of 10% from your total withdrawal unless your withdrawal is from a Roth IRA, or unless you elect otherwise.

If you hold shares in a taxable account, you are required to pay taxes on mutual fund distributions, whether the distributions are paid out in cash or reinvested in additional shares. The funds report distributions to shareholders on IRS Form 1099-DIV after the end of each calendar year.

Investors can view the total amount of dividends paid for the reporting period in the financing section of the statement of cash flows. The cash flow statement shows how much cash is entering or leaving a company. In the case of dividends paid, it would be listed as a use of cash for the period.

Corporate actions such as dividends are handled directly by the share registry. You can access your historical dividend payments by contacting the share registries that the company is associated with. The share registry will be able to provide you with information such as payment history and tax statements.