/ Taxes

Even Reinvested Dividends in a Taxable Account are Always Subject to Taxation

I see this misconception every so often in the ChooseFI Facebook group and other such financial "forums."

Taxable brokerage accounts do not shield your dividends from being taxed as income. It doesn't matter if you reinvest your dividends, spend them, or light them on fire.

Of course, being subject to taxation isn't the same thing as actually paying taxes on them; if your dividends are qualified dividends, then they are subject to the lower long term capital gains rates, which can be 0%.

Even Reinvested Dividends in a Taxable Account are Always Subject to Taxation
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