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Dividends: Increase Your Income Without Moving a Muscle

How much money do you pay in taxes every year?

Do you want to lower that number without jeopardizing your six figure income?

It’s possible.

All you have to do is diversify your sources of income. Learn the taxation rules applicable to all your income sources to help you save money. Why? Because ALL INCOME IS NOT TAXED EQUALLY.

Various Types of Income

There are many income streams a person can have.

You can have W-2 income if you work for wages as an employee. Cashiers, bank tellers, bankers, accountants, and lawyers who are employed to perform work on behalf of a company are W-2 employees.

You can have 1099 income if you are an independent contractor. If a company pays you (non-employee) over $600 for services during the year, you will receive a 1099-MISC form that will be used when you complete your tax return. The person or company did not consider you an employee and did not withhold federal income tax or Social Security and Medicare tax.

You can have interest income from your fixed rate assets. These accounts include savings, checking, and certificates of deposit.

You can also have dividend income.

The Dividend Advantage

Dividend income is what you receive when you invest in a publicly-listed or privately held company. You are essentially giving a company more money to run their business. Some companies thank you for your investment by providing you with monthly or quarterly income classified as “dividends”.

You don’t have to work hard to obtain dividend income; you benefit from the hard work of other people. Let’s say you decide to invest in Apple Inc. (Nasdaq: AAPL). All the employees of Apple are working hard for their shareholders. When you’re an investor, you are a shareholder. So the employees are working hard for you! They are running the company in a way that will maximize shareholder value. That is their primary objective.

Take Advantage of Lower Tax Rates

Dividend income is one way wealthy people are able to pay lower tax rates. Most of the time, when someone refers to how a rich person pays low taxes, what they’re actually referring to is the percentage of their income that they pay in income taxes.

Let’s say you have a million dollars of taxable income. You could expect to pay the highest tax rate on your income – 39.6% (for 2017)! Effective in 2018, that tax rate would drop to 37%. But that’s still a high amount to pay on taxes.

So you reduce your taxable “earned” income and create more investment income. Earned income can be taxed in one of 7 tax brackets ranging from 10% to 37%. But investment income in the form of long term capital gains or qualified dividend income receives more favorable tax treatments ranging from 0% – 20%. There is an additional rate of 3.8% if you have Net Investment Income and modified adjusted gross income over the thresholds provided by the IRS.

It’s time to take our dividends to the next level. You can spend hours scouring the web and fact-checking all the information you receive or you can gather expert resources from a Certified Public Accountant and take the FastPass to success.

Your Dividend Game Plan

First, sign up below and let us know what you would like to learn.

Second, grab your copy of Dividends Are a Queen’s Best Friend. It’s a female-friendly book that will make shopping at the stock market as simple as shopping at the mall. This is for the beginning level investor who has no idea how investing works and is afraid to lose money.

Then, dive into the Dividends Are a Queen’s Best Friend COURSE. This beginning level course will help you tap into ways to start getting dividends in the next 30 days. Dividends are everywhere and this course will expose you to the many ways you can start turning your paychecks into passive income. Don’t wait until it’s too late. The worst thing you can do is live with regret and miss out on knowledge that is right in front of you.

When you are ready to live off dividends and get the latest tax and investing strategies delivered to your inbox, you can join The Dividend InvestHER: Passive Income For Life.

About Charlene Rhinehart, CPA

Charlene Rhinehart is a Certified Public Accountant, Founder of Wealthy Women Daily, and Editor-in-Chief of the Dividend InvestHer and The Wealthy Woman Investor. Charlene is currently the Chair of the Illinois CPA Society Taxation Individual Committee. With over a decade of experience in the financial services industry, Charlene is one of the few leaders who design insights specifically for the woman investor. Charlene’s work has been featured in a variety of publications including the Huffington Post, Black Enterprise, and the American Institute of Certified Public Accountants. In 2019, Charlene released her book “Dividends Are a Queen’s Best Friend”, on Amazon.

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