Money Market Funds
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David Dierking Mar 28, 2017
Dividends paid out by mutual funds fall into two categories: qualified and ordinary.
Qualified dividends are ordinary dividends that qualify for a lower tax rate provided that certain criteria are met. Qualified dividends are dividends that come from stocks held by the fund for at least 60 days of the 121-day period that begins 60 days prior to the ex-dividend date. In addition, the dividend must be issued by an American or qualifying foreign company.
Ordinary dividends are those that do not meet the criteria for qualified dividends and get taxed at a higher rate. Ordinary dividends include not only non-qualified equity dividends but also the income generated from bonds, money market securities and bank products. Income from products such as real estate investment trusts (REITs) and master limited partnerships (MLPs) is considered ordinary income.
With the income generator on our sister site Dividend.com, you can search nearly 1,600 dividend stocks that pay dividends in corresponding months.
Ordinary dividends are taxed at the taxpayer’s ordinary income tax rate. These rates range from 10% to 39.6%.
|Ticker||Name||Qualified / Ordinary||AUM|
|VTSAX||Vanguard Total Stock Market Index||Both||$518 billion|
|FBGRX||Fidelity Blue Chip Growth||Qualified||$19 billion|
|RPMGX||T. Rowe Price Mid-Cap Growth||Qualified||$25 billion|
|VBISX||Vanguard Short Term Bond Index||Ordinary||$48 billion|
|FDRXX||Fidelity Government Cash Reserves||Ordinary||$136 billion|
To learn more about mutual fund distributions, check out our What are Mutual Fund Distributions article.
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Money Market Funds