When you open a mutual-fund account, you can receive dividends as cash or have them reinvested. You can also do this with stocks in either of these:
- Dividend-reinvestment program
- Employee stock-purchase plan
Most people reinvest their dividends, which buys more shares. However, when you buy shares through reinvestment, it’s like you received the cash and immediately bought more shares. You must keep track of the basis of each share when you buy them — whether directly or through reinvestment.
Not sure if your child’s unearned income qualifies for the kiddie tax? Let H&R Block help you determine if the kiddie tax rules apply to your child’s income.
If you report income earned in a nonresident state on your resident and nonresident return, will you be double-taxed? Learn more from the tax experts
Is an inheritance considered taxable income? Learn more from the tax experts at H&R Block.
Find out if disability insurance is taxable when you file your next return. H&R Block explains everything you need to know about disability insurance.