how to find the best dividend-paying stocks
Plus, there's a good chance many investors will miss the biggest dividend tax hit.
U.S. President Barack Obama, who earlier had suggested raising the dividend tax on those earning $250,000 or more, now says he wants to increase the tax on those earning $400,000 or more. Republicans have suggested raising the dividend tax on those earning $1 million or more.
Many investors wouldn't be affected by either proposal: Among Americans who receive qualified dividends - those taxed as capital gains, not regular income - 48% make less than $250,000 a year.
And there are some stocks that will be relatively immune to the fiscal cliff tax effects.
For those who will keep their money in dividends, we've highlighted some of the best picks among dividend-paying stocks for 2013, as well as some you'll want to avoid.
In the third quarter, dividend increases by U.S. companies amounted to $8.8 billion, according to S&P Dow Jones Indices.
During the quarter, there were nearly 440 dividend increases, up more than 25% from the third quarter of 2011.
Companies that aren't in the S&P 500 also are among those sharing the wealth. The percentage of non-S&P 500 common issues paying a dividend again increased, to 43.4% in the third quarter from 42.7% in the second quarter, 41.7% in the first quarter and 41.4% at the end of the fourth quarter of 2011.
Even with all the positive news for dividend-paying stocks, there are some that are best avoided. Here are a few to keep out of your portfolio.
We all know the story and the problem.
The U.S. Federal Reserve has lowered interest rates to basically zero and has made it clear it intends to keep them there for years. The hope is that this eventually spurs the economy and returns us to a state of economic growth.
While we don't know how the Fed's efforts will succeed given two more years, we do know that it has created near impossible conditions for investors in search of income.