Ordinary Dividends

AAA

DEFINITION of 'Ordinary Dividends'

A share of a company's profits passed on to the shareholders on a periodic basis. Ordinary dividends are taxed as ordinary income and are reported on Line 9a of the Schedule B of the Form 1040. All dividends are considered ordinary unless they are specifically classified as qualified dividends.

INVESTOPEDIA EXPLAINS 'Ordinary Dividends'

Dividend income is one of the major advantages of stock ownership. Companies will report all aggregate ordinary dividends in box 1 of the Form 1099-DIV. Mutual fund companies pay and report dividends in the same manner.

Find out how ordinary dividends affect your tax return; check out Who needs to fill out IRS Form Schedule B?

VIDEO

Loading the player...
RELATED TERMS
  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Illegal Dividend

    A dividend declared by a corporation that is in violation of ...
  3. Nontaxable Dividends

    Dividends from a mutual fund or some other regulated investment ...
  4. Stock Dividend

    A dividend payment made in the form of additional shares, rather ...
  5. Qualified Dividend

    A type of dividend to which capital gains tax rates are applied. ...
  6. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
RELATED FAQS
  1. What are the main factors that drive share prices in the utilities sector?

    Two of the main drivers in share prices for companies in the utility sector are interest rates and the amount of dividends ... Read Full Answer >>
  2. Which retail stocks pay the highest dividends?

    The retail sector consists of diverse groups of companies that specialize in pure online retail sales, brick-and-mortar retail ... Read Full Answer >>
  3. What dividend yield is typical for the airline sector?

    A dividend yield of 1% is typical for the airline sector. However, many airlines do not pay any dividends at all unlike other ... Read Full Answer >>
  4. How does the risk of investing in the utilities sector compare to the broader market?

    The risk of investing in the utilities sector is less than the broader market. The two main reasons are the high dividends ... Read Full Answer >>
  5. Are so-called self-offering and self-management covered by "Financial Instruments ...

    As the Financial Services Agency (FSA) explains, self-offering of interests in collective investment schemes falls under ... Read Full Answer >>
  6. How can the price of a stock change on the ex-dividend date?

    An investor looking for a dividend-paying stock has two important dates to consider when investing in a company. The first ... Read Full Answer >>
Related Articles
  1. Investing Basics

    The Power Of Dividend Growth

    Dividends may not seem exciting, but they can certainly be lucrative. Learn more here!
  2. Investing Basics

    How And Why Do Companies Pay Dividends?

    If a company decides to pay dividends, it will choose one of three approaches: residual, stability or hybrid policies. Which a company chooses can determine how profitable its dividend payments ...
  3. Options & Futures

    Dividends, Interest Rates And Their Effect On Stock Options

    Learn how analyzing these variables are crucial to knowing when to exercise early.
  4. Fundamental Analysis

    Why Dividends Matter

    Seven words that are music to investors' ears? "The dividend check is in the mail."
  5. Investing Basics

    How Dividends Work For Investors

    Find out how a company can put its profits directly into your hands.
  6. Professionals

    Worried About Stocks? Try on Convertibles

    Convertibles are a good hedge against equity market risk (if you're o.k. with losing a bit of upside potential).
  7. Investing

    Prospering In The Next Bear Market: Here's How

    Prepare to survive, and even prosper, in the impending bear market, by considering and putting into action the following four strategies.
  8. Mutual Funds & ETFs

    Looking To Invest In Texas? Here Is How

    Ranging from energy to household names, here are some of the top investment opportunities in Texas.
  9. Personal Finance

    More Bonuses And Fewer Raises Affect Workers

    Companies are increasingly replacing salary increases with bonuses, much to the detriment of employees.
  10. Stock Analysis

    Why Hasn't McDonald's Beaten The Dow Recently?

    McDonald's has underperformed the Dow Industrials since 2009, but a reorganization and buyback could turn things around.

You May Also Like

Hot Definitions
  1. Radner Equilibrium

    A theory suggesting that if economic decision makers have unlimited computational capacity for choice among strategies, then ...
  2. Inbound Cash Flow

    Any currency that a company or individual receives through conducting a transaction with another party. Inbound cash flow ...
  3. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  4. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  5. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  6. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!