Washington Post To Pay Dividends Early Due To Anticipated Tax Increases
The Washington Post Company announced yesterday that it will be paying its 2013 dividend in 2012, a move that will allow shareholders to avoid any increase in the
capital gains dividend tax rate that may occur after December 31st:
WASHINGTON (AP) — The Washington Post Co. will pay its 2013 dividends before the end of this year to try to spare investors from anticipated tax increases.
The media and education company said Friday that its dividend of $9.80 per share is payable Dec. 27 to shareholders of record as of Dec. 17. The payout is instead of regular quarterly dividends next year.
Washington Post is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.
Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.
As noted, many companies have made this move recently, and one can be assured that there’s other income-shifting going on as well.