Question

Capital gains and dividends taxed at 75%+ in TurboTax?!!?

Forum|Forum|5 years ago
February 20, 2021
2 replies
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This is the first year I've had measurable capital gains and dividends to enter via multiple 1099-DIV forms. I've been told that I should be paying around 15% tax on qualified dividends and capital gains and probably around 24-27% tax on nonqualified dividends.

Figuring these numbers by hand, I'd expect my refund to go down by ~$620. However, entering the info from the two 1099-DIV forms into TurboTax, my refund goes down by more than $1400!

Is this a glitch in the software? Anyone else have a similar problem? Is there something I'm forgetting (I've entered all info from the forms) that is causing the gains and dividends to be taxed at 2-3x what I'd expect?

A

AmeliesUncle

Look at the actual Form 1040 to see what is happening.

Although your actual "income tax" on Line 16 of Form 1040 from that income may only be about $620. the "extra" income may affect other things on your tax return. Things like the Earned Income Credit, Premium Tax Credit, taxable Social Security, Recovery Rebates and more can be significantly changed when adding 'extra' income.

So look at Form 1040 (and maybe the 'numbered' Schedules), both before and after adding that income, to see what is actually changing.

N

npierson777

It could happen because of the additional income put you in a different tax bracket or some credits became disallowed. Look at numbers on your Summary page before you file. There is always an option to talk with Live TurboTax expert to get help in your particular situation.