Which one is more rewarding if you take dividends or don’t participate in the ex-rights? The planner uses 3 tables to teach you how to make better investment decisions

Note: Deposit stocks is a retirement financial management method that has been popular among the public in recent years. However, the fact that dividends are taxed is often ignored by investors. Accountant Wang Ruidong used 3 tables to explain the differences in the merger and tax distribution, the differences in the difference in the dividend and the net cash inflows not participating in the exclusion, and the tax costs of overseas investment income. Only by calculating the money paid clearly can the investment make better profits.

In recent years, the stock market has become popular, and ETFs and stocks with high dividends and high yields have been widely received by many investors. Taking cash dividends is like raising red bags from the company you invest in, which is exciting. However, what many people ignore is that dividends also have tax costs. The dividends I have won this year will be paid for a tax payment next year!

How much tax does it cost to win a dividend? Can tax be paid without participating in the removal? What is the difference in tax costs when investing in Taiwan or US stocks? Wang Ruidong, the professional association technician firm, used 3 forms to explain these problems. Only by calculating clearly before investing can you make money clearly.

How to apply for dividend income more cost-effective? Wang Ruidong pointed out that there are two ways to apply for dividend income. The first way to apply is to "consolidate tax" between dividends and other personal income, and the tax rate varies according to the income level. In 2022, the tax range of personal comprehensive income tax is as follows: if the annual net income of less than 540,000 yuan is 5%; if the annual net income exceeds 540,000 yuan to 1.21,000 yuan, the course is 12%; if the annual net income exceeds 1.21,000 yuan to 2.42,000 yuan, the course is 20%; if the annual net income exceeds 2.42,000 yuan to 4.53,000 yuan, the course is 30%; if the annual net income exceeds 4.53,000 yuan, the course is 40%.

If dividend income and other income are combined, they can enjoy a tax reduction of 8.5%, which is limited to 80,000 yuan.

Another way of reporting is "divided tax". The name is to tax dividend income and other income, and the applicable single tax rate for dividend income is 28%. Ordinary people may think that, since this is the case, as long as the applicable tax rate for individual combined income is 30-40%, should they choose to pay taxes on dividends? In fact, this may not be the case.

Wang Ruidong, for example, Xiao Ming holds 100 ETFs 0056. In 2021, 0056 will allocate cash dividends of 1.8 yuan per share, and Xiao Ming will receive 180,000 cash dividend income that year.

If Xiao Ming chooses to consolidate taxes, the tax amounts that are subject to be paid are as follows:

If Xiao Ming chooses to open taxes, the tax amounts to be paid according to the income level difference are as follows:

{twenty four}

From the above two tables, it can be seen that only when Xiao Ming's income level exceeds 4.53 million and the applicable tax rate is 40%, can he choose tax distribution achieve the effect of tax collection. The difference is that the tax reduction amount is 8.5% of the combined tax dividend income, and whether the tax is divided.

In addition, Wang Ruihong also reminded that the special deduction amounts for long-term care and the special deduction amounts before kindergarten are subject to wealth quotas. Those who choose to split taxes will not be used. Therefore, in addition to tax rates, personal needs must be considered in order to choose the most favorable way of reporting.

Can tax be paid without participating in the depreciation? What is the difference in transaction costs when making a difference in price or dividend?

"Investment is nothing more than making the capital profit, and tax is a cost. Before making investment decisions, you must consider the tax cost." Wang Ruidong said. For individuals, dividend income is taxed, but if the capital gains of the stock are purchased, the tax is not required. Only 0.3% of the certificate is required when selling the stock. A single analysis from the perspective of taxation, without participating in the removal of the rights will definitely have the effect of taxation. However, what is the better investment strategy for the difference in dividends and non-dividends?

From the example of Xiao Ming, 2021, ex-dividend ex-dividend on October 22, 2021, and cash dividends of RMB 1.8 per share are allocated. Before ex-dividend, the price per share of 0056 was about 32.38 yuan, and the ex-dividend was about 30.71 yuan the next day.

1. If Xiao Ming decides not to participate in the de-interest and the difference in the price of the dividend, he will sell 100 stocks the day before the ex-dividend, and then buy the full amount after the ex-dividend the next day, the tax payment cost will be RMB 9,714 (32.38*100*1000*0.3%). If the transaction fee paid to brokers is calculated at 0.1425% of the transaction amount, the continuous fee for the purchase and seller will be RMB 4,614 (32.38*100*1000*0.1425%) and RMB 4,376 (30.71*100*1000*0.1425%) respectively.

Therefore, when Xiao Ming does not participate in the ex-interest, his post-tax net cash inflow is: (32.38-30.71)*1000*100-9714-4614-4376=148,296

2. Pure cash inflows involving the ex-interest and the lead dividend

If Xiao Ming chooses to participate in the ex-interest, the total dividend income of 0056 that year is 180,000. However, when the single dividend income exceeds 20,000, an additional 2.11% recharge is required. Therefore, the supplementary guarantee for Xiao Ming's dividend is: 180,000*2.11%=3,798.

In addition to supplementing the guarantee, dividend income also requires tax. If Xiao Ming is a high-income group and chooses to separate taxes, the net cash inflow after tax is: (1.8*1000*100*72%)-3,798=125,802.

But if Xiao Ming is retired and does not have much other income besides dividends, it is a more favorable option for him to consolidate taxes and enjoy an 8.5% tax reduction. Calculated at a 5% tax rate, the net cash inflow after tax is: (1.8*1000*100*1.035)-3,798=182,502.

Wang Ruidong analyzed that in terms of the principle, if a retiree does not have a fixed salary and his income mainly comes from dividends, the overall income tax rate will not be too high, and it is more beneficial to participate in the ex-rights. However, if you have high salary income and high tax rate, you may have better profits if you do not participate in the exclusion.

However, Wang Ruihong also reminded that the practice of selling stocks before ex-dividend and buying after ex-dividend can be taxed, but investors may also bear the losses of poor prices. Investors should still consider whether they can grasp the changes in stock prices and make the investment strategy that suits them the most.

There is a tax exemption of 6.7 million overseas income! What is the difference in taxes to invest in Taiwan stocks and US stocks?

In recent years, the trend of investing in US stocks has gradually risen. Should overseas income be taxed?

Wang Ruihong pointed out that if overseas income is less than 1 million, there is basically no tax required. For those who have overseas income exceeding 1 million, the tax calculation method is to add domestic income and foreign income, deduct 6.7 million tax exemption, and multiply it by 20% of the tax rate to obtain the basic tax. If the general income tax is higher than or equal to the basic tax, there is no need to pay the basic tax.

He example is that Xiao Ming and Xiao Wang have both earned 5 million and earned 5 million from dividends. But Xiao Ming's dividend is from Taiwan's dividends, and Xiao Wang is from overseas investment. After the calculation, Xiao Ming had to pay 2.53 million 6,000 yuan in taxes, while Xiao Wang only paid 1.13 million 6,000 yuan.

However, if non-US citizens invest in U.S. stocks, the dividends they receive will also be deducted by a 30% tax. If you buy US stocks through a commission, you will also need to pay the Taiwan brokerage firm's manual fees. Therefore, investors should still consider their familiarity with different investment tools and the cost of each item in order to determine how to allocate assets more favorably.

"There are many factors to be considered for good investment decisions. We cannot ignore tax costs, but we cannot regard tax costs as the only decision-making basis." Wang Ruidong said. Only by calculating each bill clearly can the investment be taken to the next level!

Original text: Which one is more rewarding if you take dividends or don’t participate in the exclusion? Can you pay taxes when buying US stocks? 3 tables to calculate tax costs clearly and make better investment decisions