ChumSlickJon

Investing - Dividend Income Stream Questions

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Anyone here have experience with Dividend's, Qualified vs. Ordinary and how to handle taxation on them?  

I use turbo tax and pay extra for the version that allows you to import investments.  This year I got hit with a charge for under payment.  It looks like they are counting my ordinary dividends as a business and as such expect my to pay quarterly?  The charge wasn't for very much money, but should I be sending money to the IRS every quarter out of these ordinary dividends?  

Edited by ChumSlickJon

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I cannot answer the specific question, but I pay quarterly to IRS and NYS just to avoid the underpayment issue. Last year my employer started withholding monthly performance comp checks at 22% meaning all of us will be underpaying. I am sending IRS extra 15% just to stay even. And I pay NYS a prorata amount based on my days in NYS to keep them out of my hair. 

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What does your monthly income and performance in NY and Florida have to do with dividend income?  

 

Tom......... are you trying to peacock again?  

the-hardest-spongebob-face-quiz-youll-ev

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Qualified vs ordinary is just what tax rate you pay I think.  LT capital gains vs ordinary income. You get penalized if you under withhold on whatever. I have other income streams over withhold to compensate but it’s only a guess on my part.  

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With Dividends, it's not like an employer who can withhold for you.  How do I go about setting up something?  

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Just now, Brother Brian said:

Be better off 'finding' some deductions that offset.

I don't think it works that way.

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Just now, Kml said:

You can pay estimated taxes to the feds, they never turn away money. People that are self employed do this. 

 

 

Yep. Prolly do it online now. My method was to low ball estimated payments (not stupid but lower..). Then file an extension, do the taxes to see how much I owed. "Find' deductions to offset that amount to 0 (or close) then file. It gives you like an extra 4/5 months to get the money and 'find' the deductions.

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33 mins ago, ChumSlickJon said:

Anyone here have experience with Dividend's, Qualified vs. Ordinary and how to handle taxation on them?  

I use turbo tax and pay extra for the version that allows you to import investments.  This year I got hit with a charge for under payment.  It looks like they are counting my ordinary dividends as a business and as such expect my to pay quarterly?  The charge wasn't for very much money, but should I be sending money to the IRS every quarter out of these ordinary dividends?  

I don’t know why they counted as a business. I get turbo tax deluxe and never have a issue like that.

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1 min ago, JMB said:

I don’t know why they counted as a business. I get turbo tax deluxe and never have a issue like that.

I'm gonna call them and find out why.  It's a REIT and they say certain Real Estate investments are treated that way.  :shrug:  I want some clarity on that.  I mean, the pay is good I just want to make sure I'm doing it right.  

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