Dividends are taxed as what at the investor's tax rate?

Dividends are indeed taxed as ordinary income at the investor's tax rate. When an investor receives dividends from stocks or mutual funds, those payments are considered a form of income and are taxed as such in the year they are received.

Ordinary dividends, which are the most common type of dividend, do not receive the same favorable tax treatment that qualified dividends do, which might be taxed at a lower capital gains rate. However, for regular reporting, investors should consider these payments as part of their overall income, thus aligning them with the ordinary income tax brackets.

This classification is crucial for tax planning, as it affects how much an investor pays in taxes on their investment income. Understanding this can help investors make informed decisions regarding their portfolios and anticipate their tax liabilities accurately.