money market fund dividend taxation
so it looks like I got a 1099-div ,my question is-are dividends added to my income and taxed at my normal rate ?
Also-what if I take a withdrawal or sell some for cash ?
how is that taxed ?
what if I have to withdraw some of the money that I invested before the dividends ?
can you answer that ??
Thanks as always
Terry Says
The INTEREST you earn in a MM fund is taxed as ordinary income, at your marginal tax bracket. You’ll get a 1099 to report that interest.
But the money in your fund is YOUR money. You can withdraw some or all at any time, with no taxes due.
