Taxes on payout of interest, dividends and CG Distributions

[Raymond01]

I have switched our taxable accounts to payout all interest, dividends and Cap gains distributions. That account manager says they cannot withhold taxes on those as they are paid monthly. Does that match what others have experienced? This is an EDJ account.

 

[RE2Boys]

It's highly unusual for income taxes to be withheld from dividends or interest and I suspect EDJ really doesn't want to bother. I see over 100+ tax returns each year and maybe one will have a 1099div with income taxes withheld. It usually results from someone failing to report that income on their tax return and the IRS then requiring the payer to withhold at the source.

 

[pb4uski]

...Does that match what others have experienced? ...

Yes, this is typical. But it was taxable income before as well even if you reinvested them and you didn't have tax withheld so it isn't really any different and shouldn't affect your taxes withheld or refund.

 

[Texas Proud]

It is typical for them not to withhold....


As in another thread, it is not impossible.... but something they do not want to get into if they can help it...

If you are talking big money.... just pay qtrly payments....

 

[Kimo]

Vanguard does offer the option to withhold taxes but if I remember correctly they only have one percentage rate available? I think it was 21 or 28 percent, I decided against it.

 

[Raymond01]

Thanks everyone.

 

[braumeister]

This is an EDJ account.

I think you just put your finger on the problem.