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A qualified dividend is an ordinary divided that meets IRS requirements to be taxed as capital gains rather than income.
Ordinary dividends (company earnings paid out to shareholders) are typically taxed as income. Income is generally taxed at a higher rate than capital gains. Most shareholders therefore keep a larger portion of a qualified dividend, compared to an ordinary dividend.
Related Links
Investopedia’s article on qualified dividends
Bankrate’s article on qualified dividends
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