How Interest Income, Dividends, and Capital Gains are Taxed

How Interest Income, Dividends, and Capital Gains are Taxed


Investment income is a significant part of many taxpayers’ income and it’s important to understand how it’s taxed.

What is investment income? In essence, it’s interest, dividends, and capital gains and it may be subject to taxation. The specific tax rate that applies to each type of investment income, however, depends on several factors, including the length of time the investment was held and the type of dividend received.

Interest income

Dividends

Reporting interest and dividend income

Capital gains

Bottom line



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