These 6 Dividend Stocks Generate $7,273 a Year. Here’s What Taxes Could Cost You
A $200,000 dividend portfolio sounds straightforward until the IRS takes its annual cut, and the bracket you sit in determines how much of that income quietly disappears before you ever reinvest a dollar.
At the 24% bracket, the six-stock, $200,000 portfolio below produces about $7,273 a year in dividends. Taxed at the ordinary rate, roughly $1,746 of that goes to the IRS every year. Inside a Roth IRA, qualified distributions are not includible in gross income under 26 U.S.C. § 408A(d)(1), so the full amount stays invested.
Where $1,746 a Year Leaks Out of a Taxable Account
The portfolio splits equally, with about $33,333 in each stock, for a combined yield of 3.64%. For 2026, the 24% rate applies to single taxpayers with income over $105,700 and to joint taxpayers over $211,400.
| Scenario | Gross Income | Tax at 24% | Net Income |
|---|---|---|---|
| Roth IRA | $7,273 | $0 | $7,273 |
| Taxable account | $7,273 | $1,746 | $5,528 |
The Roth advantage comes to $1,746 a year, or $17,456 over 10 years, assuming no new contributions and no growth.
Six Stocks Driving the Roth Edge
| Stock | Yield | Annual Income | Tax Avoided at 24% |
|---|---|---|---|
| Verizon (NYSE:VZ | VZ Price Prediction) | 6.37% | $2,124 | $510 |
| Concentrix (NASDAQ:CNXC) | 5.24% | $1,748 | $419 |
| Paychex (NASDAQ:PAYX) | 4.25% | $1,417 | $340 |
| First Busey (NASDAQ:BUSE) | 3.53% | $1,176 | $282 |
| Fastenal (NASDAQ:FAST) | 2.05% | $682 | $164 |
| Casey’s General Stores (NASDAQ:CASY) | 0.38% | $127 | $30 |
- Verizon has the biggest dollar delta. It pays $0.7075 a quarter, and second-quarter adjusted EPS of $1.30 beat the $1.27 consensus.
- Concentrix yields more because shares have fallen 29.39% this year. Its $1.48 forward dividend is well covered by fiscal 2026 non-GAAP EPS guidance of $10.97 to $11.09.
- Paychex lifted its quarterly payout to $1.19 from $1.08. Each raise increases the income that a taxable account would otherwise shrink.
- First Busey earned $0.69 in diluted EPS last quarter against a $0.26 dividend, so the payout is well covered.
- Fastenal and Casey’s General Stores bring dividend growth more than current income. On Casey’s, the annual tax saving is just $30.
One catch: all six are domestic corporations, so their dividends generally count as qualified dividend income under 26 U.S.C. § 1(h)(11)(B). The 0%, 15%, or 20% rates apply to qualified dividends. The 24% figure is the ceiling, which applies when holding-period rules are missed or the dividend is taxed as ordinary income.
How Your Bracket Changes the Gap
| Tax Rate | After-Tax Income | Annual Roth Advantage |
|---|---|---|
| 15% (qualified) | $6,182 | $1,091 |
| 22% | $5,673 | $1,600 |
| 24% | $5,528 | $1,746 |
| 32% | $4,946 | $2,327 |
| 37% | $4,582 | $2,691 |
A taxpayers in the 37% bracket gives up $2,691 a year on the same stocks. The higher your bracket, the more each dollar of yield is worth inside the Roth.
Compounding Turns $1,746 Into $51,981
Reinvest the $1,746 each year at a conservative 4%, and the 24% bracket advantage increases to $20,958 after 10 years and $51,981 after 20. The 20-year total would be $34,912 without reinvestment. These figures assume no price gains and no dividend increases. They show the permanent cost of keeping today’s income stream outside a Roth (if you still have a window from your final paycheck to your first RMD, that is also the cheapest time to convert, something we sized up in a free Roth guide here).
Three Moves Before Your Next Tax Filing
- Look at last year’s Form 1099-DIV and separate ordinary dividends from qualified ones. That tells you which rate from the table applies to each position.
- Run the Roth conversion math on Verizon and Concentrix first. Together, they account for about $510 plus $419 of the annual tax drag at 24%.
- If Casey’s or Fastenal sits in your Roth while higher yielders sit outside it, compare the tax saving per stock above before deciding which shares should hold the Roth space.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
