From 24/7 Wall St. · Lee Jackson · · 1m 20s
5 Dividend Stocks for 100% Tax-Free Roth IRA Income
Roth IRA stocks avoid $4,651 yearly tax on $27,400 dividend income.
In brief
Roth IRA stocks avoid $4,651 yearly tax on $27,400 dividend income. Five dividend stocks generate $27,400 annually in income with $4,651 saved yearly in taxes when held in a Roth IRA instead of taxable account. Originally reported by 24/7 Wall St..
Tax Impact of Dividend Stocks
Holding dividend stocks in taxable accounts costs $4,651 yearly in taxes for a $27,400 portfolio.
Roth IRA Tax Advantage
Roth IRAs tax dividend income at zero, saving $4,651 yearly compared to taxable accounts.
Portfolio Breakdown
Five stocks: Verizon, Altria, Realty Income, AT&T, and Chevron each with $100,000 allocations.
Realty Income's Tax Impact
Realty Income's monthly distributions are taxed at ordinary rates, costing $1,442 yearly in taxes.
Verizon's Recent Performance
Verizon shares faced their worst day since 2002 due to SpaceX U.S. network plans.
Altria's Dividend Increase
Altria raised its quarterly dividend to $1.11 from $1.06.
AT&T's Share Price Drop
AT&T fell alongside Verizon on Starlink fears.
Chevron's Year-to-Date Gain
Chevron shares rose 42.86% year to date, lowering its dividend yield.
Tax Bracket Impact
Higher tax brackets increase the annual tax cost from $4,531 to $6,502 for the same portfolio.
Long-Term Tax Savings
Reinvesting $4,651 yearly tax savings at 4% compounds to $138,498 over 20 years.
The main idea
Five dividend stocks generate $27,400 annually in income with $4,651 saved yearly in taxes when held in a Roth IRA instead of taxable account.
