Dividends are taxed at different rates depending on how long you have owned the shares. While unqualified dividends are taxed at the same rate as ordinary income, other dividends are taxed at a lower rate. This is true regardless of the investor's tax bracket, although the biggest savings are achieved by investors in the two upper brackets, where the difference in tax rates between the two types of dividends can reach up to 20%. If your dividends are ordinary (unqualified) dividends, they will be taxed at your marginal tax rate on regular income.
When someone asks about current tax rates, they could be referring to several different types of tax rates. Net investment income tax is an additional 3.8% tax that applies to dividend income and realized profits. If you have a net capital gain, you may be taxed at a lower tax rate than the tax rate that applies to your ordinary income. One way to minimize the taxes that are paid on dividends is to try to have qualified dividends, those that incur a lower tax rate than unqualified dividends.
