Did you know some investments give you money regularly, like getting an allowance? Two popular choices are REITs (like owning tiny parts of many buildings) and dividend stocks (like owning a small piece of a company). They both pay you, but the taxes are different!
- REITs pay out most of their money, but the tax on that money can be high (up to 37%).
- Dividend stocks also pay you, but the tax can be lower (0% to 20%), if you own the stock long enough.
- Some REIT payments aren't taxed right away; they lower how much you originally paid for your share. But you’ll pay taxes later when you sell.
| Type | Tax | Other |
|---|---|---|
| REIT Dividends | High (up to 37%) | Often best in tax-protected accounts |
| Qualified Dividend Stocks | Low (0%-20%) | Better for taxable accounts |
