Dividends are grossed up on your tax return, meaning that you pay a higher rate of tax than you do on your earned income.

Name: Dividends are grossed up on your tax return, meaning that you pay a higher rate of tax than you do on your earned income.
Brand: Quizplus
Rating: 4.8 (44 reviews)

Question

Quizplus · Accepted Answer

Dividends are grossed up to reflect the corporation tax already paid by the company, but they are taxed at a different rate than earned income, often resulting in a lower effective tax rate for many taxpayers.

Dividends Are Grossed Up on Your Tax Return, Meaning That