Income, Not Dividends, Double-Taxed

BY RICHARD P. CREAGH

I read with interest “ An Opinion on Dividends’ Taxation ” and the claim that dividends are not double-taxed. While I agree the dividends are not double-taxed, the income, however, is.

The corporation pays tax on its earnings and then the stockholder pays tax when dividends are paid by the corporation (out of aftertax profits) and included as income in the stockholder’s tax return.

One other point: The corporation’s board of directors, not management, declares dividend amounts.

Richard P. Creagh, CPA
Brea, California

SPONSORED REPORT

Keeping client information safe in an age of scams and security threats

A look at the Dirty Dozen tax scams and ways to protect taxpayer information.

TECHNOLOGY Q&A

How to create maps in Excel 2016

Microsoft Excel 2016 has two new mapping capabilities. J. Carlton Collins, CPA, demonstrates how to make masterful 2D and 3D maps in Excel 2016.

QUIZ

News quiz: IRS enforcement, a hot job, and audit value

The IRS’s 2016 Data Book, a “hot job” of particular interest at this time of year, and insight into how executive and audit committees view the insights from financial statement audits received attention recently. See how much you know with this short quiz.