Mutual funds that don't pay dividends?

[Unionville]

I've been trying to find funds that don't pay dividends or very low ones. I don't want dividends for tax reasons.  Even though I have a fair share of non-qualified dividends (tax friendly), I still always end up with way more taxable distribution than I anticipated at tax time.

Do you recommend any mutual funds with low or no dividends? I've been searching on google but not getting the info I'm looking for.

[seattlecyclone]

I believe mutual funds in the US are required by law to distribute any dividends they receive out to their fund shareholders. The way to get a fund with low dividends would then to pick a fund that invests in companies that don't pay many dividends. A growth-oriented fund such as VUG would get you more in that direction. Of course you should consider more than just taxes before you heavily tilt your portfolio toward growth companies.

[billygoatjohnson]

This has been asked a million times but,

Berkshire Hathaway is an option. It pays zero dividend and is fairly diversified.

Another option is to do a growth fund which pays less. Then switch your tax advantage accounts to value, to achieve similar weight to S&P 500 or Total U.S.

The struggle is real when your taxable account gets up there in value and your trying to keep your income low. 500k in taxable creates $9k of "income" every year in Total U.S.

[Unionville]

This has been asked a million times but,

Sorry - Probably happens when people are in a learning phase and my attempted searches aren't giving me the answers.  I especially find results in MMM hard to drill down. I always wonder if something I ask has been asked a million times and always try to search first.  We are all at different stages.

[ATtiny85]

I've been trying to find funds that don't pay dividends or very low ones. I don't want dividends for tax reasons.  Even though I have a fair share of non-qualified dividends (tax friendly), I still always end up with way more taxable distribution than I anticipated at tax time.

Do you recommend any mutual funds with low or no dividends? I've been searching on google but not getting the info I'm looking for.

Is the bolded part the real problem? I have one legacy holding that is all over the place with dividends and capital gain distributions. However, our main taxable holding, VTSAX, does not vary wildly each year in dividends. Or least, not enough to really throw me off. Since all the distributions in that legacy are sent to VTSAX, the variance is decreasing over time.

How fine of a plan are you trying to make? I would not go trying to minimize dividends without a really good reason. (ditto for maximizing them...)

[Unionville]

I've been trying to find funds that don't pay dividends or very low ones. I don't want dividends for tax reasons.  Even though I have a fair share of non-qualified dividends (tax friendly), I still always end up with way more taxable distribution than I anticipated at tax time.

Is the bolded part the real problem?

How fine of a plan are you trying to make? I would not go trying to minimize dividends without a really good reason. (ditto for maximizing them...)

I want to be able to control what taxes I expect to pay, which I can easily plan for when I cash out LT capital funds.  But dividend interest income seems to be all over the map every year (and for me taxed at a higher rate since it's 'ordinary income') and I don't see any benefit of having that type of income.  I have no interest in interest :)

[billygoatjohnson]

I've been trying to find funds that don't pay dividends or very low ones. I don't want dividends for tax reasons.  Even though I have a fair share of non-qualified dividends (tax friendly), I still always end up with way more taxable distribution than I anticipated at tax time.

Is the bolded part the real problem?

How fine of a plan are you trying to make? I would not go trying to minimize dividends without a really good reason. (ditto for maximizing them...)

I want to be able to control what taxes I expect to pay, which I can easily plan for when I cash out LT capital funds.  But dividend interest income seems to be all over the map every year (and for me taxed at a higher rate since it's 'ordinary income') and I don't see any benefit of having that type of income.  I have no interest in interest :)

VTSAX/VTI/total U.S is typically 1.6%-1.8%. It's steady. S&P is similar. I think you have your options... One other idea is use M1 finance. And make your own pie/index fund out of good companies that throw no dividends... But that might cost you by missing performance.

[billygoatjohnson]

Vanguards growth index fund pays about half of Total U.S. So approx .8% compared to Total U.S 1.6%

[ATtiny85]

I've been trying to find funds that don't pay dividends or very low ones. I don't want dividends for tax reasons.  Even though I have a fair share of non-qualified dividends (tax friendly), I still always end up with way more taxable distribution than I anticipated at tax time.

Is the bolded part the real problem?

How fine of a plan are you trying to make? I would not go trying to minimize dividends without a really good reason. (ditto for maximizing them...)

I want to be able to control what taxes I expect to pay, which I can easily plan for when I cash out LT capital funds.  But dividend interest income seems to be all over the map every year (and for me taxed at a higher rate since it's 'ordinary income') and I don't see any benefit of having that type of income.  I have no interest in interest :)

Most of VTSAX dividends are Qualified, so likely a lower rate. Again, something like a total stock fund does not have dividends "all over the map".

[billygoatjohnson]

I've been trying to find funds that don't pay dividends or very low ones. I don't want dividends for tax reasons.  Even though I have a fair share of non-qualified dividends (tax friendly), I still always end up with way more taxable distribution than I anticipated at tax time.

Is the bolded part the real problem?

How fine of a plan are you trying to make? I would not go trying to minimize dividends without a really good reason. (ditto for maximizing them...)

I want to be able to control what taxes I expect to pay, which I can easily plan for when I cash out LT capital funds.  But dividend interest income seems to be all over the map every year (and for me taxed at a higher rate since it's 'ordinary income') and I don't see any benefit of having that type of income.  I have no interest in interest :)

Most of VTSAX dividends are Qualified, so likely a lower rate. Again, something like a total stock fund does not have dividends "all over the map".

It's not just about taxes owed on it. It also makes income too high for ACA, savers credit, and probably a bunch of other goodies I'm not aware of (other than food stamps and stuff haha).

[Telecaster]

I'm with you, I'm not really a fan of dividends.   Vanguard has a tax advantaged fund, which I believe minimizes dividends.  And as others mentioned, Berkshire Hathaway is essentially a managed mutual fund that does not pay dividends.   So very tax efficient. 

[billygoatjohnson]

I'm with you, I'm not really a fan of dividends.   Vanguard has a tax advantaged fund, which I believe minimizes dividends.  And as others mentioned, Berkshire Hathaway is essentially a managed mutual fund that does not pay dividends.   So very tax efficient.

Yeah vanguard tax advantage helps but only a hair. You can plug it into portfolio visualizer and turn on to display income and put it against VTI. I looked into when when starting the taxable account but didn't choose it.

This is a fun tool to see how much of a tax drag those dividends are. https://www.physicianonfire.com/calculators/taxdrag/