Each year I end up having to report dividends to the IRS and it costs me money. Is it not better just to look for non paying dividend companies that are good value as well or over the long run it's worth pay taxes for the dividends?
Thanks
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Sign up to join this communityEach year I end up having to report dividends to the IRS and it costs me money. Is it not better just to look for non paying dividend companies that are good value as well or over the long run it's worth pay taxes for the dividends?
Thanks
It depends on whether you need the dividend income or not - certainly you'll pay more tax on dividends than you would eventually on the capital gains, but if you don't need the income (or would rather cash out stocks and pay capital gains taxes) then yes, non-dividend-paying stocks would (all else being equal) be better from a tax standpoint.
That said, I would NOT eschew a stock JUST because it pays dividends. If you have a stock that you feel is a good value but it pays a dividend, the gains on the stock might outweigh the dividend plus the tax paid on the income.
Yes.
Let's consider what you need to have good success in investing:
These four are the only free lunches in investing.
Now let's consider what Berkshire Hathaway offers you:
The time horizon entirely depends on you. Plus, on top of these, Berkshire Hathaway pays no dividend.
So, if you find it acceptable that you don't have international diversification, by all means go ahead and purchase Berkshire Hathaway's non-dividend-paying stock.
You probably won't find a good portfolio of non-dividend-paying stocks other than Berkshire Hathaway.