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February 19, 2022
Question

Why is only the ordinary dividends amount added to my income when the 1099-DIV info includes qualified dividends and capital gains?

  • February 19, 2022
  • 1 reply
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1 reply

SteamTrain
Employee
February 20, 2022

1)  Qualified dividends are a subset of the Ordinary Dividends, so just the Ordinary dividends are added o yoru income....(Yes, the terminology is confusing).  Thus if box 1a is 300, and 1b is 200, you have $300 of dividends, and of that same 300, there are 200 that are eligible for special consideration to be taxed at lower rates....which the software deals with.

 

2) Cap gains in box 2a, are part of any $$ listed on line 7 of the form 1040.....for which the total value on that line depends on what other cap gains or cap losses you have for any other entries you've made. 

 

 

 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*