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March 3, 2020
Question

As far as I can tell TT did not tax LT Qualified Cap Gains/Div at the correct rate, but used by bracketed regular rate. Has anyone run into this?

  • March 3, 2020
  • 2 replies
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TT used the bracketed rate for all my income and not the special rate for qualified capital gains/dividends (15% in my case) for that portion of the income.  Anyone else notice this?

2 replies

March 3, 2020

where are you looking?  

 

The IRS will calculate your tax twice and then use the lower of the two.  First, it will assume everything is ordinary income.  Then it will re-do it, splitting ordinary income vs. capital gains / div income.   The lower of the two calculations is the tax. 

March 3, 2020

there was a change in the law effective 2018

 

basically the ordinary income gets tax at whatever the tax tables/tax rate schedule calculate.  if the ordinary income pushes you above the 20% bracket your capital gains/ qual div get tax at 20% none gets taxed at 15%

 

 

 

what this does is prevent double dipping in the 15% bracket  - some for ordinary income and then for qualified dive and LTCG