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What are 'Ordinary Dividends'

Ordinary dividends are 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.

BREAKING DOWN '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?

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RELATED FAQS
  1. Are qualified dividends included in ordinary dividends?

    Qualified dividends are included with ordinary dividends in Box 1a of the Internal Revenue Service Form 1099-DIV; the box ... Read Answer >>
  2. If I reinvest my dividends, are they still taxable?

    If you reinvest your dividends, you still pay taxes as though you received the cash. Stock dividends are generally not taxable ... Read Answer >>
  3. In what situations must taxes be paid on a stock dividend?

    Understand the situations in which investors must pay taxes on stock dividends received, and the different tax rates that ... Read Answer >>
  4. How are capital gains and dividends taxed differently?

    The U.S. tax code gives similar treatment to ordinary dividends and short-term capital gains, and qualified dividends and ... Read Answer >>
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