Although you don't receive the reinvested dividends as cash, they are still consideredtaxable incomeby the IRS (unless they are held in a tax-advantaged account, like a Roth IRA).1 Retirement Plan DRIPs If you want toset up a DRIPthat purchases more shares of the company for which you ...
If you had taken your dividend payments in cash instead of reinvesting them, you would have pocketed $24,367.68 in dividends. But you would have just 1,000 shares now, valued at only $134,640. By reinvesting your dividends each year, you increased your gains by 47%. When To Take the...