What exactly are dividends?

What percentage of tax on dividends after retirement?

• If a person is retired, single with no dependent, over 60 years old, and his only income is the dividends on the stocks that he has purchased, does he still have to pay 40% tax on the dividends? For example, if he only gets $5000 on his dividends each year, will he have to pay 40% tax on the $5000 of dividends?

• Answer:

  No, not if they're "qualified" dividends, which means they're dividends received by an individual from a US company or a foreign corporation resident in a country with which the United States has a comprehensive income tax treaty. If they're qualified dividends, you pay the reduced rate of 15%. Your age, dependents, and nature of other income are irrelevant to the dividend tax rate.