DRIP Calculator 2026 | Dividend Reinvestment Tax & Income Planner
Underwrite your 2026 Dividend Reinvestment Plan (DRIP) trajectory. This fiduciary-grade analyzer models the “phantom income” tax drag of qualified vs. ordinary dividends, calculates Return of Capital (ROC) cost basis adjustments, and projects your long-term Yield on Cost (YOC). Account for the §1411 NIIT surcharge and model the optimal Stop-DRIP transition to maximize your after-tax cash flow.
DRIP vs cash dividends
Taxable vs tax-advantaged
Qualified + ordinary dividend mix
Tax drag + NIIT + state tax
Basis tracking + ROC
Stop-DRIP strategy
1Portfolio & Contribution Setup
Starting portfolio value.
Used to estimate starting and future shares.
Annual cash yield before taxes.
Growth in dividend income per year.
Annual share-price appreciation estimate.
Projection horizon.
Additional annual investment contribution.
How often dividends are reinvested or distributed.
2Tax & Account Treatment
Determines whether dividend tax drag applies.
Portion of dividends taxed at qualified rates.
Federal qualified-dividend rate assumption.
Federal ordinary-income tax rate assumption.
Applied only to taxable-account dividend planning if enabled.
Estimated state tax on dividends.
Optional NIIT overlay for high-income investors.
Used for real-income interpretation.
3Basis & Strategy Layer
Reduces basis over time.
Year after which dividends are taken as cash.
Shows DRIP vs income-mode comparison.
Used for recommendation messaging.
This workbench focuses on the gaps most DRIP calculators miss: after-tax reinvestment, cost-basis impact, return-of-capital adjustments, and the switch from growth mode to income mode.
📈
Enter portfolio, dividend, tax, and strategy assumptions to compare pure DRIP with after-tax income-taking and stop-DRIP scenarios.
DRIP Ending Value
—
With reinvestment
Cash Strategy Value
—
Without reinvestment
Tax Drag
—
Tax cost over projection
Ending Basis
—
Includes reinvested dividends
Unrealized Gain
—
Estimated gain above basis
Real Income
—
Inflation-adjusted annual dividend
4Strategy Comparison
5DRIP Planning Summary
| Metric | Result | Meaning |
|---|
Underwriting DRIP Mechanics: Compounding Velocity vs. Tax Friction
A Dividend Reinvestment Plan (DRIP) automatically uses your cash dividends to buy more shares instead of paying the cash to you. It sounds simple — but in a taxable account, each reinvested dividend is still a taxable event, each new share purchase creates a new cost-basis lot, and over 20 years the cumulative tax drag can cost you tens of thousands of dollars in lost compound growth.
DRIP (Dividend Reinvestment Plan)
Instead of receiving a dividend payment, your brokerage automatically buys fractional shares using the dividend amount. Over time this compounds your share count and dividend income. Most brokerages — Fidelity, Schwab, Vanguard, Robinhood — offer free DRIP enrollment. The key question is whether reinvesting makes more sense than taking the income.
Qualified vs Ordinary Dividends
Qualified dividends (most US stock dividends held 60+ days) are taxed at the long-term capital gains rate — 0%, 15%, or 20% depending on income. Ordinary (non-qualified) dividends are taxed at your regular income rate (up to 37%). NIIT adds an additional 3.8% on top for high earners. This calculator lets you model the exact qualified/ordinary mix for your portfolio.
Tax Drag in Taxable Accounts
Every dividend paid in a taxable brokerage account is taxable — whether you reinvest it or not. In a DRIP, you pay tax on the dividend but only reinvest the after-tax amount. Over 20 years at a 4% yield and 15% tax rate, the cumulative tax drag on a $25,000 starting portfolio can exceed $15,000. This workbench quantifies that drag in exact dollars.
📐The 3-Strategy DRIP Framework This Calculator Models
1
Pure DRIP — Full Reinvestment
All after-tax dividends are automatically reinvested to purchase additional shares every period. This strategy maximizes share accumulation and compound growth but produces no cash income. Best for investors in the growth phase who don’t need current income. In tax-advantaged accounts (IRA/401k) there is zero tax drag — all dividends reinvest at full value.
2
Cash Dividend Strategy — Income Mode
Dividends are paid out as cash and not reinvested. The portfolio grows only through share price appreciation and new contributions. This strategy produces regular income — useful for retirees or investors who need cash flow — but gives up the compounding benefit of DRIP. The share count stays flat between contributions.
3
Stop-DRIP Strategy — Hybrid Growth-to-Income Switch
You DRIP for the first N years (growth phase), then stop reinvesting and take dividends as cash (income phase). This is the most sophisticated strategy: you grow the portfolio aggressively early, then flip it to an income machine after reaching a target size. The calculator models the exact year you stop, the income generated after, and whether it meets your income goal.
4
Cost Basis Tracking Across All Three Strategies
Every reinvested dividend adds a new cost-basis lot. When you eventually sell, your capital gain is computed as: sale price − adjusted basis. A higher basis means a lower capital gains tax bill at sale. Return-of-capital (ROC) distributions reduce your basis without being immediately taxable — but they lower your basis and increase future gains. This workbench tracks all of it.
✅ Tax-Advantaged Accounts (IRA, 401k, Roth): In a tax-deferred or tax-free account, dividends are never currently taxable. All dividends reinvest at full value — zero tax drag. DRIP in a tax-advantaged account is almost always superior to a taxable DRIP. Select “Tax-Advantaged Account” in the calculator to see the difference clearly.
⚠️ The NIIT Trap: The Net Investment Income Tax (NIIT) is an additional 3.8% federal tax on investment income — including dividends — for taxpayers with MAGI above $200,000 (single) or $250,000 (MFJ). High-income DRIP investors in taxable accounts effectively face a combined federal dividend tax rate of up to 23.8% (20% + 3.8%) before state taxes. Enable NIIT in the calculator to model your true after-tax reinvestment rate.
The Concept of “Phantom Income” in Taxable Accounts
When you execute a Dividend Reinvestment Plan (DRIP) within a taxable brokerage account, you trigger a highly specific IRS liability known colloquially as “phantom income.” Even though the dividend cash never physically enters your bank account—because it is autonomously swept into purchasing fractional shares—the IRS still taxes the distribution exactly as if it were cash-in-hand.
Form 1099-DIV & The Out-of-Pocket “Tax Drag”
At the close of the fiscal year, your brokerage will issue a Form 1099-DIV reporting the gross value of your reinvested dividends. Because the DRIP consumed the actual cash to acquire more equity, you are forced to pay the resulting federal and state tax liability out of pocket using external funds. This uncompensated cash outflow is the literal definition of tax drag.
To prevent catastrophic double-taxation when you eventually liquidate the position, diligent basis tracking is mandatory. Every reinvested dividend incrementally increases your adjusted cost basis (governed by IRC §1012). Failing to account for these reinvestments means you will overpay on capital gains taxes at the time of sale.
Multivariate Yield Modeling: DRIP Benchmarking & Tax-Drag Analysis
This workbench runs three simulations simultaneously — pure DRIP, cash dividends, and stop-DRIP hybrid — and reports results for each. Here’s what every input controls and where to find the numbers on your brokerage statements.
1Calculator Inputs Quick Reference
| Input | What It Controls | Where to Find It |
|---|---|---|
| Initial Investment | Starting portfolio value — the base for all compound growth projections. | Your brokerage account current value |
| Current Share Price | Used to convert dollar value into a starting share count. Drives fractional share DRIP math. | Current stock/ETF/fund price |
| Dividend Yield % | Annual cash yield as a % of current value. Applied to shares × price each period. | Brokerage dividend history or fund prospectus |
| Dividend Growth Rate % | Annual growth in per-share dividend income. Models dividend-growth investing (e.g., dividend aristocrats). | Historical dividend growth rate — 5-year CAGR |
| Share Price Growth % | Annual capital appreciation. Separate from dividend yield — total return = yield + price growth. | Historical stock/fund performance or your estimate |
| Years | Projection horizon — 1 to 60 years. Longer horizons amplify the DRIP vs cash strategy gap. | Your investment time horizon |
| Contribution per Year | Additional annual investment added to the portfolio. Shares bought at the current price each year. | Your planned annual investment amount |
| Reinvestment Frequency | Monthly, quarterly, semiannual, or annual. More frequent reinvestment slightly increases compounding. | Your brokerage’s DRIP payment schedule |
| Account Type | Taxable: tax drag applied each period. Tax-Advantaged: dividends reinvest at 100% — zero drag. | Is this a brokerage, IRA, 401k, or Roth? |
| Qualified Dividend % | Portion taxed at long-term capital gains rates (0/15/20%). The remainder is taxed as ordinary income. | Brokerage year-end 1099-DIV (Box 1b ÷ Box 1a) |
| NIIT Rate % | Additional 3.8% on investment income for MAGI above $200K/$250K. Only applies in taxable accounts. | Check if your MAGI exceeds the NIIT threshold |
| State Tax Rate % | State income tax on dividends. Combined with federal rate for total tax drag calculation. | Your state’s dividend tax rate |
| ROC per Year | Return-of-Capital distribution — reduces your basis without current tax. Increases future capital gains. | Form 1099-DIV Box 3 — check fund distributions |
| Stop DRIP After Year | The year you switch from reinvestment to income mode in the hybrid stop-DRIP strategy. | Your target retirement or income-start year |
| Income Goal per Year | The annual after-tax income you want from dividends after stopping DRIP. Used for gap analysis messaging. | Your post-DRIP income need estimate |
2How the 6 Output Metrics Are Calculated
📈 DRIP Ending Value
Each period: shares × current price. After-tax dividends buy new fractional shares. New contribution shares are added. Price grows at the stated rate each period. The ending value is total shares × end-of-period price. This is the highest-value scenario in almost all growth conditions.
💵 Cash Strategy Value
Same share price growth as DRIP, same contributions — but dividends are paid as cash and NOT reinvested. The ending value reflects price appreciation and contributions only. The gap between DRIP and Cash endings is the direct compounding benefit of reinvestment, net of tax.
⚡ Tax Drag
The cumulative taxes paid on all dividends over the projection period in a taxable account. Calculated as: (qualified dividends × qualified rate) + (ordinary dividends × ordinary rate) + (all dividends × state rate) + optional NIIT. In a tax-advantaged account, tax drag is always $0.
🏷️ Ending Basis
Cost basis = initial investment + all annual contributions + all after-tax dividends reinvested − cumulative return-of-capital (ROC). The higher your ending basis, the lower your capital gains tax bill when you eventually sell. Reinvesting dividends grows your basis — a hidden benefit of DRIP.
📊 Unrealized Gain
Ending portfolio value − ending adjusted basis. This is the embedded capital gains that would be taxable upon sale. A large unrealized gain means strong growth but also a future tax liability. Comparing unrealized gains across strategies shows how basis tracking affects your tax exposure at exit.
💰 Real Income
The last year’s projected dividend income adjusted for inflation using the stated rate. This converts nominal projected income back to today’s purchasing power — so a projected $12,000 in year 20 at 2.5% inflation is worth about $7,400 in today’s dollars. Prevents inflated income projections from misleading planning decisions.
2026 US Dividend Taxation: Qualified Rates, NIIT Surcharges & Form 1099-DIV
The tax rate on your dividend income depends on whether it qualifies for preferential rates and your total income level. These are the 2026 federal rates used as defaults in the calculator — update them to match your actual bracket.
📋2026 Qualified Dividend Tax Rates by Filing Status
| Rate | Single Taxable Income | MFJ Taxable Income | HOH Taxable Income | DRIP Impact |
|---|---|---|---|---|
| 0% | Up to $48,350 | Up to $96,700 | Up to $64,750 | Tax drag = $0 on qualified dividends. DRIP in taxable account is as efficient as tax-advantaged for dividends at this income level. |
| 15% | $48,351–$533,400 | $96,701–$600,050 | $64,751–$566,700 | The most common rate. For every $1,000 of qualified dividends, $150 goes to federal tax. DRIP reinvests $850 instead of $1,000 pre-tax. |
| 20% | Above $533,400 | Above $600,050 | Above $566,700 | High earners pay 20% federal + 3.8% NIIT = 23.8% combined. For $10,000 of qualified dividends, only $7,620 is reinvested after tax. |
📌 These rates apply to qualified dividends only — paid by US corporations or qualifying foreign corporations, and held for more than 60 days during the 121-day window around the ex-dividend date. Ordinary (non-qualified) dividends from REITs, money market funds, and short-hold positions are taxed at your regular income rate.
📋Ordinary Dividend Tax Rates — 2026 Federal Brackets
| Bracket | Single | MFJ | Example: $5,000 Ordinary Dividend |
|---|---|---|---|
| 10% | Up to $11,925 | Up to $23,850 | $500 tax — $4,500 reinvested in DRIP |
| 12% | $11,926–$48,475 | $23,851–$96,950 | $600 tax — $4,400 reinvested in DRIP |
| 22% | $48,476–$103,350 | $96,951–$206,700 | $1,100 tax — $3,900 reinvested in DRIP |
| 24% | $103,351–$197,300 | $206,701–$394,600 | $1,200 tax — $3,800 reinvested in DRIP |
| 32% | $197,301–$250,525 | $394,601–$501,050 | $1,600 tax — $3,400 reinvested in DRIP |
| 35% | $250,526–$626,350 | $501,051–$751,600 | $1,750 tax — $3,250 reinvested in DRIP |
| 37% | Above $626,350 | Above $751,600 | $1,850 tax — $3,150 reinvested in DRIP |
🚫 NIIT — Net Investment Income Tax: An additional 3.8% federal tax applies to net investment income (including all dividends) when your MAGI exceeds $200,000 (single) or $250,000 (MFJ). This is on top of your regular qualified or ordinary dividend rate. At the 20% qualified rate + 3.8% NIIT, your effective dividend tax is 23.8% — meaning only 76.2 cents of every dividend dollar is reinvested in DRIP. Enable NIIT in the calculator’s Tax & Account Treatment section.
✅ State Tax Rates on Dividends: Most states tax dividend income as ordinary income at the state income rate. Exceptions: California (13.3% top rate — one of the highest), Texas/Florida/Nevada (no state income tax — 0%), New York (up to 10.9%), Pennsylvania (3.07% flat). Enter your state rate in the calculator to model your true combined federal + state dividend tax drag.
Portfolio Scenarios: Modeling Cost Basis, ROC & Stop-DRIP Transitions
These scenarios cover the range of DRIP strategies — from a 30-year-old growth investor to a retiree switching to income mode. Each shows exact calculator inputs and projected results. Run them yourself in the workbench above.
📈 Example 1 — 30-Year-Old Growth Investor, Taxable Account, Dividend Aristocrat ETF
| Input | Value | Input | Value |
|---|---|---|---|
| Initial Investment | $25,000 | Dividend Yield | 4.2% |
| Contribution/Year | $6,000 | Share Price Growth | 6% |
| Years | 30 | Qualified Dividend % | 90% |
| Account Type | Taxable | Qualified Rate / Ordinary Rate | 15% / 22% |
| NIIT | No | State Rate | 5% |
| Dividend Growth | 5%/yr | Stop-DRIP Year | 30 (never) |
DRIP Ending Value
~$728,000
Cash Strategy Value
~$482,000
DRIP Advantage
+$246,000
Total Tax Drag
~$38,500
Ending Basis
~$394,000
Real Dividend Income (Yr 30)
~$11,200
✅ Result: DRIP outperforms the cash strategy by $246,000 over 30 years even after $38,500 of cumulative tax drag. The key: reinvesting even the after-tax dividend (85 cents on the dollar after 15% qualified rate) still compounds far faster than taking cash. The high dividend growth rate (5%/yr) amplifies the DRIP advantage over time. Verdict: DRIP aggressively for full 30 years.
🏖️ Example 2 — 55-Year-Old Pre-Retiree, Stop-DRIP at Year 10, Income Switch
| Input | Value | Input | Value |
|---|---|---|---|
| Initial Investment | $180,000 | Dividend Yield | 3.8% |
| Contribution/Year | $12,000 | Share Price Growth | 5% |
| Years | 20 | Qualified Dividend % | 85% |
| Account Type | Taxable | Qualified Rate / Ordinary Rate | 15% / 24% |
| Stop-DRIP Year | 10 | Income Goal/Year | $18,000 |
| NIIT | No | State Rate | 6% |
Stop-DRIP Ending Value
~$495,000
After-Tax Income Taken (Yrs 11–20)
~$162,000
Income Goal (10 yrs)
$180,000
Income Gap
−$18,000
Total Tax Drag
~$22,000
Ending Basis
~$298,000
⚠️ Result: The stop-DRIP strategy produces $162,000 of after-tax cash in years 11–20, but falls short of the $180,000 goal by $18,000. To close the gap: either increase initial investment, raise annual contributions during the DRIP phase, or extend the DRIP phase to year 12. Alternatively, adding $30,000 to the initial investment closes the income gap entirely. Verdict: Good strategy, small income gap — increase contributions in growth phase.
🏦 Example 3 — Roth IRA DRIP, Zero Tax Drag, Maximum Compounding
| Input | Value | Input | Value |
|---|---|---|---|
| Initial Investment | $25,000 | Account Type | Tax-Advantaged (Roth IRA) |
| Contribution/Year | $7,000 (2026 limit) | Dividend Yield | 4.2% |
| Years | 30 | Dividend Growth | 5% |
| Share Price Growth | 6% | NIIT | N/A (tax-advantaged) |
| Qualified Rate | 0% (tax-advantaged) | State Rate | 0% (tax-advantaged) |
Roth DRIP Value (30 yr)
~$865,000
Taxable DRIP Value (same inputs)
~$728,000
Roth Advantage
+$137,000
Tax Drag (Roth)
$0
Tax Drag (Taxable)
~$38,500
Roth Withdrawal Tax
$0
✅ Result: Roth IRA DRIP produces $137,000 more than taxable DRIP with identical portfolios — purely from eliminating tax drag. Every dividend dollar reinvests at 100% instead of 80–85%. Plus, all Roth growth and withdrawals are tax-free. If you have any capacity for tax-advantaged DRIP investing, maximize it before funding taxable DRIP accounts.
🏢 Example 4 — High-Income Investor, NIIT Applies, REIT Heavy Portfolio
| Input | Value | Input | Value |
|---|---|---|---|
| Initial Investment | $100,000 | Dividend Yield | 5.5% (REIT ETF) |
| Contribution/Year | $20,000 | Qualified Dividend % | 20% (REIT — mostly ordinary) |
| Account Type | Taxable | Ordinary Rate | 37% |
| NIIT | Yes (3.8%) | State Rate | 9.3% (CA) |
| Years | 20 | Share Price Growth | 4% |
DRIP Ending Value
~$718,000
Total Tax Drag
~$127,000
Effective DRIP Rate
~49% of dividend
After-Tax Reinvest
51 cents/$1
Ending Basis
~$422,000
Cash Strategy Value
~$549,000
🚫 Result: High-income REIT investors face brutal combined taxes: 37% ordinary + 3.8% NIIT + 9.3% CA state = ~50.1% effective rate on ordinary REIT dividends. Only 49 cents of every REIT dividend dollar is reinvested via DRIP. Tax drag totals $127,000 over 20 years. Strategy: Hold REITs in a Roth IRA or 401(k) — not in a taxable account. Move high-yield ordinary-dividend assets to tax-advantaged accounts and hold qualified-dividend ETFs in taxable.
🔄 Example 5 — Return-of-Capital (ROC) Impact on Basis, MLP/Infrastructure Fund
| Input | Value | Input | Value |
|---|---|---|---|
| Initial Investment | $50,000 | Dividend Yield | 6.0% |
| ROC per Year | $1,500 | Account Type | Taxable |
| Years | 15 | Qualified Dividend % | 30% |
| Ordinary Rate | 24% | State Rate | 5% |
| Share Price Growth | 3% | Contribution/Year | $5,000 |
DRIP Ending Value
~$264,000
Ending Basis (with ROC)
~$89,000
Ending Basis (without ROC)
~$111,500
ROC Basis Reduction
−$22,500
Extra Capital Gain at Sale
+$22,500
Tax on Extra Gain (15% LT)
~$3,375
⚠️ Result: $1,500/year of ROC over 15 years reduces basis by $22,500. ROC is not taxable when received — but it reduces your basis, turning deferred tax into a larger capital gain when you sell. The net effect is a $3,375 higher future capital gains tax bill. MLP and infrastructure funds frequently have high ROC distributions. Track your basis annually using Form 1099-DIV Box 3 data — the IRS expects you to reduce basis correctly even if your brokerage doesn’t do it automatically.
★ Master Dividend Strategies: Yield-on-Cost (YOC) & Asset Location Arbitrage
Most DRIP guides tell you to “just reinvest everything.” These eight tips go deeper — covering asset location, ROC tracking, NIIT management, and when stopping DRIP actually makes you wealthier.
Tip 01 — Asset Location
Put High-Yield Ordinary Dividend Assets in Tax-Advantaged Accounts
REITs, MLPs, covered call ETFs, and bond funds generate ordinary (non-qualified) dividends taxed at up to 37% + 3.8% NIIT. These should be in your IRA or 401(k) where dividends are never currently taxed. Put qualified-dividend-paying dividend-growth ETFs (VIG, DGRO, NOBL) in your taxable brokerage instead — their 0–15% rate makes taxable DRIP viable.
Tip 02 — 0% Rate Harvesting
DRIP Aggressively If Your Qualified Dividend Rate Is 0%
Single filers under $48,350 and MFJ filers under $96,700 pay 0% federal tax on qualified dividends. At this income level, taxable DRIP is as efficient as a Roth IRA for dividend income — no tax drag at all. If you’re in this bracket in early career or a low-income year, maximize taxable DRIP contributions. The $0 tax on dividends is a temporary window — use it.
Tip 03 — ROC Tracking
Track Return-of-Capital Every Year — Don’t Let Your Basis Hit Zero
ROC from MLPs, REITs, or infrastructure funds reduces your basis. When basis hits $0, any further ROC is immediately taxable as capital gains — the tax-deferral benefit disappears. Track your basis in a spreadsheet or tax software annually using Form 1099-DIV Box 3 data. If your basis is close to zero, consider selling and repositioning the asset before the forced gain recognition.
Tip 04 — NIIT Management
Manage MAGI to Stay Below the $200K/$250K NIIT Threshold
The 3.8% NIIT applies when your MAGI exceeds $200,000 (single) or $250,000 (MFJ). Traditional 401(k), HSA, and SEP-IRA contributions all reduce your MAGI dollar-for-dollar. If you’re just above the NIIT threshold, a modest increase in pre-tax retirement contributions can eliminate the additional 3.8% on all your dividend income — saving more than the contribution’s immediate tax benefit for DRIP investors with large dividend income streams.
Tip 05 — Frequency Optimization
Reinvest Monthly Rather Than Annually When Possible
Monthly DRIP buys shares 12 times per year instead of once — a form of dollar-cost averaging. You buy more shares when prices are lower and fewer when prices are high. For a $100,000 portfolio with a 4% yield, the difference between monthly and annual reinvestment compounds to roughly $8,000–$15,000 over 20 years depending on price volatility. Most brokerages support monthly DRIP at no extra cost.
Tip 06 — Stop-DRIP Timing
Switch to Income Mode in a Low-Income Year — Not at Retirement
When you stop DRIPping and start taking dividends as cash, the dividend income is taxable that year. If you stop DRIP in your last high-income working year, you stack dividend income on top of your salary — potentially pushing into a higher bracket. Instead, plan the stop-DRIP switch for a year when your income is lower: a sabbatical year, the year you retire, or a year with large above-the-line deductions like a large retirement contribution or business loss.
Tip 07 — Basis Records
Specify “Highest Cost” Lot Method When Selling DRIP Shares
Years of DRIP create dozens of cost-basis lots at different prices. When you eventually sell, specifying the “Highest Cost” (also called HIFO — Highest In, First Out) lot method sells your most expensive shares first — minimizing the capital gain and your tax bill. Your brokerage lets you choose your lot method at the time of sale. “Average Cost” (the default for mutual funds) is not always optimal. Keep records in case you switch brokerages — historical DRIP lots don’t always transfer correctly.
Tip 08 — Wash Sale Risk
Pause DRIP Before Tax-Loss Harvesting the Same Security
The IRS wash sale rule disallows a capital loss if you buy “substantially identical” securities within 30 days before or after the sale. If you sell shares at a loss for tax-loss harvesting and your DRIP automatically buys more shares of the same ETF within that 30-day window — even with a reinvested dividend — your loss is disallowed. Pause DRIP enrollment for 31 days before and after any tax-loss harvest sale on that security to protect the deduction.
📊DRIP Strategy Selection Matrix
| Your Situation | Best Strategy | Key Action |
|---|---|---|
| Under 40, long time horizon, no income need | Pure DRIP — taxable + tax-advantaged | Maximize contributions, monthly reinvestment, focus on dividend-growth ETFs |
| Near NIIT threshold ($200K/$250K MAGI) | DRIP in tax-advantaged + limit taxable DRIP | Max 401(k), HSA, SEP-IRA to stay below NIIT threshold |
| High-yield REIT or MLP portfolio, taxable account | Move assets to IRA/401(k), DRIP there | Asset location — ordinary dividends belong in tax-advantaged accounts |
| 5–10 years from retirement, accumulation phase | Stop-DRIP hybrid — DRIP now, switch to income at retirement | Model stop-DRIP year in calculator, ensure income goal is met |
| Currently in 0% qualified dividend bracket | Aggressive taxable DRIP — no tax drag | Maximize taxable brokerage DRIP while 0% rate applies |
| MLPs or infrastructure funds with ROC | DRIP cautiously — track basis annually | Monitor Form 1099-DIV Box 3, prevent basis from hitting zero |
| Retiree needing current income | Cash dividend strategy or stop-DRIP | Turn off DRIP, model actual after-tax cash income against your spending needs |
Q FAQs: Phantom Income, Cost Basis Tracking & Wash Sale Rules
Answers to the most common questions about DRIP tax treatment, cost basis, the NIIT, return of capital, and the stop-DRIP income strategy.
Do I pay tax on reinvested dividends even if I don’t receive cash?
Yes — and this is the most misunderstood aspect of DRIP investing in taxable accounts. When your brokerage reinvests a dividend, the IRS treats it exactly the same as if you received cash and used it to buy shares. The dividend amount is taxable income in the year it’s paid — whether you received cash or shares. You will receive a Form 1099-DIV each year showing all dividends, including reinvested amounts. This is the core tax drag of DRIP in a taxable account. In a Roth IRA or 401(k), this tax does not apply — dividends reinvest at full value.
How does DRIP affect my cost basis and future capital gains tax?
Every reinvested dividend purchase creates a new cost-basis lot at the price paid on that reinvestment date. Over 20 years of monthly DRIP, you may have 240 separate lots. Your total basis equals: initial investment + all annual contributions + all after-tax dividends reinvested − any return-of-capital (ROC). When you sell, your capital gain = sale price − your basis. Because DRIP adds to your basis with every reinvested dividend, your taxable gain is lower than if you had simply held the original shares. Keep your brokerage cost-basis records — especially if you transfer between brokerages, as historical DRIP lots don’t always transfer correctly.
What is the difference between qualified and ordinary dividends for DRIP?
Qualified dividends are taxed at the long-term capital gains rate (0%, 15%, or 20%) — significantly lower than ordinary income rates. To qualify, the dividend must be paid by a US corporation or qualifying foreign corporation, and you must hold the stock for more than 60 days during the 121-day window centered on the ex-dividend date. Ordinary dividends — from REITs, money market funds, covered call ETFs, and short-held positions — are taxed at your regular income rate (up to 37%). In DRIP planning, the higher the ordinary dividend proportion, the more tax drag you face per dollar reinvested in a taxable account.
When does the Net Investment Income Tax (NIIT) apply to my dividend DRIP?
The NIIT is an additional 3.8% federal tax on net investment income — including all dividends — when your MAGI exceeds $200,000 (single or MFS) or $250,000 (MFJ or qualifying surviving spouse). These thresholds are not indexed for inflation, so more investors hit the NIIT each year as incomes rise. For a $10,000 dividend payment, NIIT costs an extra $380 — on top of your regular qualified (15–20%) or ordinary (22–37%) rate. Enable NIIT in the calculator’s Tax & Account Treatment section if your MAGI exceeds these thresholds.
What is Return of Capital (ROC) and how does it affect my DRIP basis?
Return of Capital (ROC) is a distribution that is not classified as dividend income — it’s treated as a return of part of your original investment. ROC is reported in Form 1099-DIV Box 3. It is not immediately taxable. Instead, it reduces your cost basis. For example, if you invest $50,000 and receive $1,500/year in ROC for 10 years, your basis falls to $35,000. When you eventually sell, your capital gain is calculated from this lower basis — meaning the deferred tax comes due at sale. If basis reaches $0, any further ROC is immediately taxable as capital gain. MLPs, infrastructure funds, and some REIT ETFs have significant ROC distributions — track Box 3 each year.
Is DRIP better in a taxable account or a Roth IRA?
Roth IRA DRIP is almost always superior to taxable DRIP for high-yield portfolios. In a Roth IRA: (1) dividends are never currently taxable — they reinvest at 100%, (2) growth is tax-free, and (3) qualified Roth withdrawals are completely tax-free. In a taxable account, every dividend is a taxable event and eventual gains are subject to capital gains tax. The difference over 30 years for a typical dividend portfolio is $100,000–$200,000+ in favor of the Roth IRA. The trade-off: Roth contributions are limited ($7,000 in 2026, $8,000 if 50+) and subject to income phase-outs ($150K–$165K single, $236K–$246K MFJ for 2026).
How do I stop DRIP on my brokerage account?
At most major brokerages, DRIP enrollment and unenrollment is done through the dividend reinvestment settings — usually found under Account Settings → Dividends, or by selecting the specific position and looking for a “Reinvest” toggle. At Fidelity and Schwab, you can enable or disable DRIP at the individual security level. At Vanguard, DRIP applies at the account level for most funds. Changes typically take effect starting with the next ex-dividend date. When you stop DRIP, future dividends will be paid as cash to your settlement account. The existing shares purchased through prior DRIP reinvestments are not affected.
What is the wash sale rule and how does it affect DRIP investors?
The wash sale rule (IRC §1091) disallows a capital loss deduction if you buy “substantially identical” securities within 30 days before or after selling at a loss. DRIP creates a specific risk: if you sell shares at a loss for tax-loss harvesting but your DRIP automatically repurchases shares of the same security with a reinvested dividend within 30 days, the wash sale rule may disallow your loss deduction. To avoid this, pause DRIP enrollment on that security for 31 days before and after any planned tax-loss harvest sale. Re-enroll DRIP after the 30-day window passes.
Can I DRIP ETFs the same way I DRIP individual stocks?
Yes. ETFs (Exchange-Traded Funds) support DRIP at most brokerages exactly the same way individual stocks do. Your brokerage reinvests the dividend by purchasing fractional shares of the ETF at the prevailing market price on or after the payment date. The tax treatment is identical to individual stock DRIP — dividends are taxable in the year paid, and each reinvestment creates a new cost-basis lot. Some ETF platforms (Vanguard mutual fund share classes) allow same-day dividend reinvestment without brokerage commission, which is a slight advantage for high-frequency reinvestment.
Does DRIP work differently for REITs vs regular stocks?
Yes — significantly. REIT dividends are primarily ordinary income (not qualified) because REITs are required to distribute at least 90% of taxable income and most of that is ordinary income from property operations. This means REIT dividends are taxed at your marginal income rate (up to 37%), not the 0/15/20% qualified rate. REITs also frequently have return-of-capital components. For these reasons, REIT DRIP in a taxable account creates much higher tax drag per dollar than dividend-growth stock DRIP. Best practice: hold REITs in a tax-advantaged account (IRA or 401k) and DRIP there — where ordinary income tax is either deferred (traditional) or eliminated (Roth).
What records do I need to keep for DRIP tax reporting?
You need to track: (1) Each DRIP purchase date and share price — your cost basis for that lot, (2) Annual Form 1099-DIV from your brokerage — shows qualified dividends (Box 1b), ordinary dividends (Box 1a), and return of capital (Box 3), (3) Annual contributions and their per-share cost basis, (4) Cumulative ROC received — reduces your overall basis. Most brokerages track cost basis automatically using the “Average Cost” or “FIFO” method, but you can specify lot-by-lot identification (Specific ID) for optimal tax minimization. Keep records for at least 3 years after the year of sale — the IRS statute of limitations for audit. If you transfer to another brokerage, verify that historical DRIP lots transferred correctly.
Can this calculator model dividend-growth investing specifically?
Yes. The “Dividend Growth Rate %” input models the annual increase in dividend income — separate from share price growth. Dividend aristocrats (S&P 500 companies that have raised dividends for 25+ consecutive years) historically grow dividends at 5–8% per year. By entering a dividend growth rate of 5–7% with a starting yield of 2.5–3%, you can model the classic dividend-growth investing strategy where the initial yield appears modest but the “yield on cost” grows dramatically over time. After 20 years at 5% dividend growth, a 2.5% starting yield becomes approximately 6.6% yield on your original cost — a powerful income stream without touching principal.
How does inflation affect my DRIP income projections and what does “Real Income” mean in the results?
Inflation erodes the purchasing power of future dividend income even as the nominal dollar amount grows. This calculator converts your projected final-year dividend income back into today’s purchasing power using the formula: Real Income = Nominal Income ÷ (1 + inflation rate)^years. For example, a projected $14,000 annual dividend in year 20 at 2.5% inflation is worth only about $8,500 in today’s dollars — a 39% purchasing-power loss. This is why dividend-growth investors target a dividend growth rate that exceeds inflation: if your dividends grow at 5%/yr and inflation runs at 2.5%/yr, your real dividend income still grows at roughly 2.4%/yr, preserving and growing purchasing power. Enter your inflation assumption in the calculator’s Tax & Account Treatment section to see both nominal and real income projections side by side.
What happens to my DRIP shares if the company cuts or eliminates its dividend?
A dividend cut or elimination immediately stops DRIP reinvestment — there is no dividend to reinvest. Your previously purchased DRIP shares are not affected; you continue to own them. However, a dividend cut is frequently accompanied by a sharp stock price decline, which reduces the market value of all your accumulated DRIP lots. This is why dividend-growth investors favor companies with long histories of consistent dividend growth (dividend aristocrats: 25+ consecutive years of increases) over high-yield companies with unstable payout ratios. In this calculator, a dividend cut scenario can be modeled by reducing the Dividend Yield % and setting Dividend Growth Rate % to a negative number — for example, −50% in year one to simulate a 50% cut followed by flat dividends.
Can I use DRIP to build a passive income stream large enough to cover living expenses?
Yes — this is the core goal of the stop-DRIP income strategy modeled in the calculator. The approach: DRIP aggressively for 15–25 years to grow your share count and dividend income, then stop reinvesting and take dividends as cash to cover expenses. The math: to generate $40,000/year in after-tax dividend income at a 3.5% yield and 15% qualified dividend rate, you need a portfolio of approximately $1.35 million. At $10,000/yr contribution plus $25,000 starting value growing at 8% total return, reaching $1.35 million takes roughly 22–24 years. Run your specific numbers in the calculator using the Stop-DRIP and Income Goal inputs to model your personal passive income timeline. The real income output adjusts for inflation to show whether your projected dividend income maintains its purchasing power at the time you stop DRIPping.
What is the difference between a brokerage-sponsored DRIP and a company-sponsored DRIP?
A brokerage-sponsored DRIP (most common today) is administered by your brokerage account — Fidelity, Schwab, Vanguard, Robinhood. Dividends are collected and used to purchase additional shares, including fractional shares, at the market price. There is typically no fee. A company-sponsored DRIP (also called a Direct Stock Purchase Plan or DSPP) is offered directly by the issuing company through a transfer agent (Computershare, EQ Shareowner). Some company plans offer shares at a 3–5% discount to market price — a significant DRIP advantage. Both follow the same IRS tax rules: dividends are taxable in the year paid, and each reinvestment creates a new cost-basis lot. For large DRIP positions in individual stocks, check whether the company offers a direct DRIP with a discount — the 3–5% discount compounds significantly over decades.
How do I report DRIP dividends on my tax return?
Your brokerage issues Form 1099-DIV each January covering the prior year’s dividends — including all reinvested DRIP amounts. Box 1a shows total ordinary dividends. Box 1b shows the qualified dividend portion. Box 3 shows any return-of-capital distributions. These amounts are reported on Form 1040 Schedule B if your total dividends exceed $1,500 (or if you hold foreign accounts), or directly on Form 1040 Line 3b for simpler returns. You do not separately list each individual DRIP reinvestment transaction — only the annual totals from Form 1099-DIV. Capital gains from selling DRIP shares are reported separately on Form 8949 and Schedule D using your per-lot cost basis records. Tax software (TurboTax, H&R Block, FreeTaxUSA) imports 1099-DIV data directly from most brokerages and handles the schedule automatically.
Does DRIP reinvestment timing affect the qualified dividend holding period?
Yes — and this is a subtle trap. Each DRIP reinvestment purchase is a separate lot with its own holding period clock. To have qualified dividend treatment on the next dividend from those newly purchased shares, you must hold each new lot for more than 60 days in the 121-day window around the ex-dividend date. If you sell DRIP-purchased shares before meeting this holding period — for example, during a tax-loss harvesting event — those shares’ dividends may be reclassified as ordinary income even if the company pays “qualified” dividends. For most long-term DRIP investors who never sell during the dividend cycle, this is not an issue. But for investors who actively sell partial DRIP positions, tracking each lot’s holding period is essential to preserve qualified dividend tax treatment.
Is DRIP a good strategy during a stock market downturn or bear market?
DRIP is particularly powerful during market downturns — and this is one of its most underappreciated features. When prices fall, each reinvested dividend buys more shares than it would at higher prices. This is dollar-cost averaging in action: you acquire a larger share count at lower prices, and when the market recovers, those cheap shares produce both price appreciation and higher dividend income. The mathematical result: investors who continue DRIPping through a 30–40% market decline and full recovery typically end with significantly more shares — and higher future dividend income — than investors who stopped reinvesting. The key discipline: do not stop DRIP during downturns out of fear. Unless the company has cut its dividend (a signal of fundamental trouble), continued reinvestment during price declines is historically one of the highest-return DRIP decisions an investor makes.
How does the dividend reinvestment frequency affect my long-term results?
More frequent reinvestment produces slightly better results due to more frequent compounding and dollar-cost averaging. The difference between monthly and annual reinvestment on a $50,000 portfolio with 4% yield over 20 years is typically $8,000–$18,000 — meaningful but not dramatic. Where frequency matters more is in volatile markets: monthly reinvestment averages into price swings 12 times per year rather than once, reducing the risk of reinvesting a full year’s dividends at a temporarily high price. Most US dividend ETFs and stocks pay quarterly (4×/year). Some pay monthly (JEPI, O, main street capital). If you hold monthly dividend payers and your brokerage supports monthly DRIP, you get 12× reinvestment cycles per year — the maximum compounding frequency available without additional contributions. Select “Monthly” in the calculator’s Reinvestment Frequency to model the full monthly compounding scenario.
What is “yield on cost” and why do long-term DRIP investors track it?
Yield on cost (YOC) is your current annual dividend income divided by your original cost basis — not the current share price. Long-term DRIP investors track YOC because it shows the true income return on capital deployed years ago. Example: You invest $10,000 in a stock yielding 3%. After 20 years of 6% annual dividend growth, the dividend has grown to approximately 9.6% of your original $10,000 — even if the stock’s current market yield is still 3% on a higher share price. A YOC above 10% on a taxable investment is considered exceptional — it means you’re generating 10 cents of annual income for every dollar you originally invested, compounding without selling a single share. This calculator models the path to high YOC through the Dividend Growth Rate % input — the higher the growth rate relative to your initial yield, the faster YOC compounds.
Can I use this calculator if my dividend income comes from a mutual fund rather than individual stocks?
Yes — the calculator works equally well for mutual funds, index funds, and ETFs as it does for individual stocks. Enter the fund’s trailing 12-month dividend yield (found on the fund’s fact sheet or Morningstar), its historical dividend growth rate (5-year CAGR), and the share price growth rate. For mutual funds, check Form 1099-DIV Box 1b to determine what percentage of distributions are qualified — bond funds and money market funds typically distribute 0% qualified dividends, while US equity index funds typically distribute 80–100% qualified. One important distinction: mutual fund capital gains distributions (Box 2a on Form 1099-DIV) are taxable in the year distributed even if reinvested, and they reduce the fund’s NAV — similar to dividends but treated differently for basis tracking. Enter any capital gains distribution yield as part of your dividend yield for conservative DRIP projections.
⚖️ IRS Compliance, E-E-A-T Standards & Fiduciary-Grade Legal Disclaimer
⚠️ Not Investment or Tax Advice
This calculator is provided for general educational and financial planning purposes only. It does not constitute investment advice, tax advice, legal advice, or accounting advice. DRIP projections are estimates based on inputs you provide. Actual portfolio values, dividend income, and tax outcomes vary with market performance, dividend policy changes, tax law amendments, and your complete financial picture. Always consult a licensed financial advisor (CFP/RIA), CPA, Enrolled Agent, or tax attorney before making investment or tax decisions.
This calculator is provided for general educational and financial planning purposes only. It does not constitute investment advice, tax advice, legal advice, or accounting advice. DRIP projections are estimates based on inputs you provide. Actual portfolio values, dividend income, and tax outcomes vary with market performance, dividend policy changes, tax law amendments, and your complete financial picture. Always consult a licensed financial advisor (CFP/RIA), CPA, Enrolled Agent, or tax attorney before making investment or tax decisions.
✅ Editorial Transparency
Built and maintained by the USFinanceCalculators.com editorial team (MAFHH INTERNATIONAL LTD). Tax parameters are based on IRS Publication 550, IRC §1(h) (qualified dividend rates), IRC §1411 (NIIT), IRC §1091 (wash sale rule), IRC §305 (stock dividends), IRS Rev. Proc. 2025-28 (2026 inflation adjustments), and Form 1099-DIV instructions. All calculations run entirely in your browser — no personal data is stored, collected, or transmitted. Last reviewed: May 18, 2026.
Built and maintained by the USFinanceCalculators.com editorial team (MAFHH INTERNATIONAL LTD). Tax parameters are based on IRS Publication 550, IRC §1(h) (qualified dividend rates), IRC §1411 (NIIT), IRC §1091 (wash sale rule), IRC §305 (stock dividends), IRS Rev. Proc. 2025-28 (2026 inflation adjustments), and Form 1099-DIV instructions. All calculations run entirely in your browser — no personal data is stored, collected, or transmitted. Last reviewed: May 18, 2026.
🚫 No Projection Guarantee
Dividend yields, share price growth rates, and dividend growth rates are user-supplied assumptions — not forecasts. Past dividend performance does not guarantee future dividends. Companies may cut, suspend, or eliminate dividends at any time. Tax rates may change through Congressional action. The IRS may issue updated guidance after this page was last reviewed. Always verify current tax rates at irs.gov before filing.
Dividend yields, share price growth rates, and dividend growth rates are user-supplied assumptions — not forecasts. Past dividend performance does not guarantee future dividends. Companies may cut, suspend, or eliminate dividends at any time. Tax rates may change through Congressional action. The IRS may issue updated guidance after this page was last reviewed. Always verify current tax rates at irs.gov before filing.
🏛️Official IRS Sources — Dividend & DRIP Tax Treatment
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IRS Publication 550 — Investment Income & Expenses
The IRS’s comprehensive guide covering all aspects of investment taxation: qualified vs ordinary dividends, DRIP tax treatment, cost basis rules, wash sale details, return of capital, and capital gains. The primary authoritative source for every tax rule in this workbench.
irs.gov/publications/p550 ↗
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IRS Tax Topic 404 — Dividends
IRS guidance on ordinary vs qualified dividend classification, the 60-day holding period requirement for qualified rates, DRIP reinvestment tax treatment, and Form 1099-DIV reporting requirements. Required reading for every DRIP investor in a taxable account.
irs.gov/taxtopics/tc404 ↗
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IRS Tax Topic 409 — Capital Gains & Losses
When you sell DRIP-accumulated shares, each lot is a separate taxable event. Tax Topic 409 covers short-term vs long-term capital gains rates, holding period rules, lot identification, and cost basis — all essential for multi-lot DRIP portfolio dispositions.
irs.gov/taxtopics/tc409 ↗
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IRS Tax Topic 430 — Wash Sales
DRIP investors who tax-loss harvest must pause reinvestment to avoid triggering the wash sale rule. Tax Topic 430 explains IRC §1091 — when a repurchase (including automatic DRIP reinvestment) within 30 days disallows a claimed capital loss deduction.
irs.gov/taxtopics/tc430 ↗
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IRS Form 1099-DIV — Dividends & Distributions
The annual form your brokerage issues covering all dividends — including DRIP reinvestments. Box 1a (ordinary dividends), Box 1b (qualified dividends), and Box 3 (return of capital) are the three inputs that drive the qualified dividend % and ROC fields in this calculator.
irs.gov/forms-pubs/about-form-1099-div ↗
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IRS Rev. Proc. — 2026 Tax Inflation Adjustments
The official IRS revenue procedure setting 2026 qualified dividend rate thresholds (0%: ≤$48,350 single / ≤$96,700 MFJ; 15%: up to $533,400 / $600,050; 20%: above) and the $200,000 / $250,000 NIIT thresholds used as defaults in this workbench.
IRS 2026 Inflation Adjustments ↗
🏦Legislative, SEC & Research Authority Sources
⚖️
IRC §1(h) — Qualified Dividend Tax Rates (US Code)
The statutory text of Internal Revenue Code §1(h) — the law that establishes the 0%, 15%, and 20% preferential rates for qualified dividend income. Subsection (11) defines qualifying dividends and holding period requirements directly implemented in this workbench.
uscode.house.gov — IRC §1(h) ↗
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IRC §1411 — Net Investment Income Tax (US Code)
The full statutory text of IRC §1411 — the law imposing the 3.8% NIIT on net investment income (including dividends) when MAGI exceeds $200,000 (single) or $250,000 (MFJ). The NIIT overlay toggle in this calculator is governed entirely by this section.
uscode.house.gov — IRC §1411 ↗
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SEC.gov — Dividend Reinvestment Plans (DRIPs)
The US Securities and Exchange Commission’s investor education page on Dividend Reinvestment Plans — covering how DRIPs work, broker-sponsored vs company-sponsored plans, cost basis tracking obligations, and investor rights. An authoritative non-IRS reference for DRIP structure and mechanics.
sec.gov/investor/pubs/drip ↗
🔧Calculator Methodology & Tax Parameter Sources
| Parameter | 2026 Default Value | Source | Statutory / Regulatory Authority |
|---|---|---|---|
| Qualified dividend rate — 0% | ≤$48,350 single / ≤$96,700 MFJ | IRS Rev. Proc. 2025-28 | IRC §1(h)(1)(B) |
| Qualified dividend rate — 15% | $48,351–$533,400 / $96,701–$600,050 MFJ | IRS Rev. Proc. 2025-28 | IRC §1(h)(1)(C) |
| Qualified dividend rate — 20% | Above $533,400 single / $600,050 MFJ | IRS Rev. Proc. 2025-28 | IRC §1(h)(1)(D) |
| NIIT rate | 3.8% on net investment income | IRS Publication 550, 2026 | IRC §1411(a)(1) |
| NIIT threshold — single / MFS | $200,000 MAGI | IRS Rev. Proc. 2025-28 | IRC §1411(b)(1)(A) |
| NIIT threshold — MFJ / QSS | $250,000 MAGI | IRS Rev. Proc. 2025-28 | IRC §1411(b)(1)(B) |
| Wash sale disallowance window | 30 days before and after sale | IRS Tax Topic 430 | IRC §1091(a) |
| Qualified dividend holding period | 60+ days in 121-day window around ex-div date | IRS Publication 550, p.19 | IRC §1(h)(11)(B)(iii) |
| Return of capital basis reduction | Reduces basis; taxable only when basis = $0 | IRS Publication 550, p.17 | IRC §301(c)(2)–(3) |
| DRIP reinvestment — taxable event | Taxable at FMV on reinvestment date | IRS Tax Topic 404 | IRC §61(a)(7) & Reg. §1.305-1 |
| Cost basis method — default | Average Cost or FIFO (brokerage-dependent) | IRS Publication 550, p.43 | IRC §1012; Reg. §1.1012-1 |
| Long-term capital gains holding period | More than 12 months | IRS Tax Topic 409 | IRC §1222(3) |
📌 All tax rate defaults are editable in the calculator’s Tax & Account Treatment section. If Congress changes qualified dividend rates, NIIT thresholds, or wash sale rules, update the relevant calculator inputs to model the new law before IRS guidance is published. The methodology table above reflects parameters as of the last review date.
© 2026 MAFHH INTERNATIONAL LTD. All rights reserved.
Legal Disclaimer · Privacy Policy · Terms & Conditions · About Us · Contact
This tool is for educational and planning purposes only. Not a substitute for professional investment or tax advice. Projections are estimates and do not guarantee actual results.
Legal Disclaimer · Privacy Policy · Terms & Conditions · About Us · Contact
This tool is for educational and planning purposes only. Not a substitute for professional investment or tax advice. Projections are estimates and do not guarantee actual results.
📅 Published: May 18, 2026
🔄 Last Updated: May 18, 2026
📖 IRC Sections: §1(h), §1411, §1091, §305, §1012
📄 Form: 1099-DIV (Boxes 1a, 1b, 3)
📚 Primary Source: IRS Publication 550
🔒 Privacy: No data stored or transmitted
🔄 Last Updated: May 18, 2026
📖 IRC Sections: §1(h), §1411, §1091, §305, §1012
📄 Form: 1099-DIV (Boxes 1a, 1b, 3)
📚 Primary Source: IRS Publication 550
🔒 Privacy: No data stored or transmitted
