What Is Dividend Income?

Dividends are payments companies make to shareholders from their profits. Qualified dividends are taxed at the lower long-term capital gains rates (0%, 15%, or 20%), while ordinary dividends are taxed as regular income. You'll receive a Form 1099-DIV from your brokerage showing what you earned. Even dividends you reinvest are taxable in the year they're paid. Dividends are reported on Schedule B if they exceed $1,500.