Dividends are taxed at 15% through 2010 which is usually lower than your tax rate, though not always. This, of course, assumes that the dividen tax rate isn't i

Dividends are taxed at 15% through 2010 which is usually lower than your tax rate, though not always. This, of course, assumes that the dividen tax rate isn't isn't raised by the new administration. And yes, the dividends that you are receiving have already been recognized by the corporation as profit and taxed at its tax rate. Your dividends are taxed twice.