Suggestions

:speech_balloon:

More Granular Dividend Tax Treatment (Plan Level)

At a plan level, allow us to specify % of dividends taxed at different rates. The most obvious case to support would be something like: i.e. 40% Ordinary Income, 60% Long-term Capital Gains

Although in theory someone would be able to do: 30% Ordinary Income, 30% Long-term Capital Gains, 40% fixed-rate Or Custom

In the international scenario, it may look like: 50% ordinary income, 50% custom or fixed

4 votes

Tagged as Suggestion

Suggested 16 March by user Shawn S

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  • 16 March Shawn S suggested this task

  • 16 March Kyle Nolan approved this task

  • avatar
    Fred E

    I just submitted a similar request on Discord. Copying it here for posterity:

    The tax settings allows the user to choose “Dividend Treatment” as either income OR cap gains (plus the fixed rate and a custom brackets option). I would love to see a small change here (or in the per-account dividend treatment setting) where you allow the user to specify the % of dividends that should be treated as qualified. You could default it to 100%, which would mean all dividends are taxed as cap gains (same as the current default). I think most users would make use of this, for example looking at my Vanguard 1099 from last year I see that while Vanguard Total Stock Market Index had 100% qualified dividends, Vanguard Total Intl Stock Market Index had about only about 60% qualified. Being able to model this would be helpful, and I think this would only require a minor change to the app to support this. Trying to model this with custom brackets would be painful.

    04 April
  • avatar
    Fred E

    I’ll add that I think this is an important feature to add because it has large tax implications – if my divs are 50% qualified, then the non-qualified portion can be fairly large and will be taxed at income rates, not cap gains rates. And more importantly, it could bump you up into a higher tax bracket (which cap gains can’t do), so it will have an affect on all other income and could make a big difference in your taxes. Without this option my model will be underestimate taxes significantly.

    04 April