Looking for Income? Get It Before the Fiscal Cliff

The fiscal cliff is currently dictating the trading action in the stock market as we near December and the year’s end. The worry is that if the Bush-era tax cuts are allowed to dissipate, the end result would likely be a significant jump in taxes, including those on dividends. The prevailing dividends tax of 15.0% is extremely accommodative to income seekers, but under the fiscal cliff, we could see the tax on dividends for the highest tax bracket surge to 39.6%. For dividend investors, this means a massive jump in taxes in 2013. Let’s take a look. Say you earn $100.00 in dividends and you are in the top tax bracket. (Want to know the top stocks for the rich? Read “QE3 and the Rich: What Stocks Will Benefit?”) You would pay $15.00 in dividend taxes now, but if you receive the $100.00 dividend on or after January 1, you’d pay a whopping $39.60. The increase would see U.S. divide...