How the 'fiscal cliff' will impact your dividend stocks

As the end of the year nears, investors remain jittery over the “fiscal cliff.” This is the $607 billion expiration of a combination of tax cuts and the beginning of a large amount of automatic spending cuts that is set to occur on January 1 unless Congress and the White House reach an agreement.

Many analysts point to nervousness over the fiscal cliff as the reason why the stock market dropped last week by the most in one week since June. The taxes that would most directly affect investors are the potential increases on taxes for dividends and capital gains – capital gains would revert back to 20 percent for long term gains and dividends would return to being taxed at a taxpayer’s marginal income tax rate.

Source: WRKO.com

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