How much tax will I owe on these dividends?
It depends on whether the dividends are 'qualified.' Qualified dividends — most US common-stock payouts and many ETF distributions held long enough — are taxed at the long-term capital-gains rates of 0%, 15%, or 20% based on your taxable income. Ordinary (non-qualified) dividends, common from REITs like O and covered-call ETFs like JEPI, are taxed at your regular income rate (10%–37%). High earners may also owe an extra 3.8% Net Investment Income Tax (NIIT) once modified AGI tops $200,000 single / $250,000 married filing jointly. This simulator shows pre-tax amounts. This is for information only, not tax advice.
Where does the dividend data come from?
It uses Yahoo Finance's trailing 12-month actual distributions, refreshed every 5 minutes with a 15–20 minute delay. For each stock, share count = allocated amount ÷ current price, and annual dividend = shares × trailing 12-month distributions. Since it's based on the past 12 months, future dividends aren't guaranteed and can rise or fall with company earnings and policy.
Are my dividends 'qualified' or 'ordinary'?
It matters a lot: qualified dividends get the lower 0/15/20% long-term rates, while ordinary dividends are taxed at your regular bracket of up to 37%. To be qualified, a dividend must be paid by a US corporation (or a qualified foreign one) and you must hold the shares more than 60 days within the 121-day window around the ex-dividend date. REIT distributions (e.g., Realty Income, O) and most covered-call ETF payouts (e.g., JEPI, QYLD) are generally ordinary. Your broker's Form 1099-DIV shows the split — box 1a is total dividends and box 1b is the qualified portion. This is for information only, not tax advice.
What is the 3.8% Net Investment Income Tax (NIIT)?
The NIIT is a 3.8% surtax on investment income — including dividends — that kicks in once your modified adjusted gross income (MAGI) exceeds $200,000 (single) or $250,000 (married filing jointly). It stacks on top of your regular dividend tax, so a high earner's qualified dividends can be taxed at 18.8% or 23.8% all-in. The thresholds are not indexed for inflation, so more investors cross them over time. Holding high-yield positions inside a Roth IRA, traditional IRA, or 401(k) shelters those dividends from current tax. This is for information only, not tax advice.
Do monthly-dividend ETFs really pay every month?
ETFs/REITs like JEPI, O (Realty Income), parts of SCHD, and QYLD pay monthly distributions. However, the amount isn't constant each month, and payout frequency varies by ticker (monthly/quarterly/semi-annual). This simulator divides the trailing 12-month total by 12 to show a 'monthly average,' which can differ from a specific month's actual deposit. To smooth monthly cash flow, investors often mix tickers with staggered payout schedules.
What is the ex-dividend date and why does it matter?
The ex-dividend date is when the right to a dividend disappears, and the price typically drops by about the dividend amount that day. So receiving a dividend coincides with the price falling by that much — it's not 'free money' but closer to cashing out part of your own asset. You must buy and hold before the record date to receive it; 'dividend capture' (buying right before and selling right after) rarely pays off after price drops and taxes.
How exactly is the monthly dividend calculated?
For each stock, share count = allocated amount ($) ÷ current price (fractional shares assumed), and annual dividend = shares × trailing 12-month distributions. The portfolio total is then divided by 12 for the monthly average. Actual payout timing varies by holding (monthly, quarterly, or semi-annual), so a given month's deposit can differ from this average. All figures are pre-tax.
SCHD or JEPI — which is better?
They differ in character. SCHD is a 'dividend growth' ETF that raises payouts yearly — its current yield is lower, but the yield on your original cost grows over a long hold. JEPI pursues 'high yield + reduced volatility' via covered-call option premiums, but its price upside is limited. SCHD is commonly chosen in the accumulation phase, while JEPI suits the drawdown phase of pulling cash flow from already-built assets.
Are 10%+ yield ETFs like JEPQ and QYLD safe?
A high yield isn't automatically good. These use covered-call strategies, selling away their holdings' upside via options and distributing that premium like a dividend. In effect, you receive a high payout in exchange for 'giving up price appreciation,' so in a bull market total return can lag a plain ETF, and the NAV (principal) may erode gradually. Look beyond headline yield and judge the tradeoff from a 'total return (dividend + price)' perspective.
How do I adjust the weights?
Small handles sit between stocks on the donut chart. Drag a handle (mouse or mobile touch) to shift weight between the two adjacent stocks; the weighted average yield and monthly/annual dividends recalculate in real time. Adding or removing stocks, or changing the investment amount, updates results instantly. Quickly test combinations to find the balance between your target monthly dividend, yield, and diversification.