Dividends can be taken as cash or reinvested in the company. Qualified dividends are taxed at lower rates than ordinary dividends. Reinvested dividends are taxed as if the cash were received.

Understanding the Context

Gains ... Investing in dividend stocks can create a nice stream of passive income. Instead of receiving payouts as cash, you can also use dividends to increase your holdings by reinvesting them to purchase ... I recently dug into the pros and cons of dividend reinvestment.

Key Insights

Readers of the article sent me questions about other dividend-related topics. Here are some of the most common questions I got: What ... New Orleans City Business: Guest Perspective: 7 things you may not know about dividends