Why is turbo tax putting qualified and ordinary dividends together?

Forum|Forum|2 years ago
February 15, 2024
2 replies
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I imported 1099 div from vanguard and Turbo Tax bunched them together. I thought they would be separate as they are taxed at a different rate. I could not find where to input the qualified dividends.

TurboTax Online

Best answer by VolvoGirl

Qualified dividends are in 1099Div box 1b.

Even though the full amount shows up as income on the 1040, if you have capital gains or qualified dividends the tax on line 16 is not taken from the tax table but is calculated separately from schedule D. The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet. It does not get filed with your return. In the online version you need to save your return as a pdf file and include all worksheets to see it.

VolvoGirlAnswer

Employee

Qualified dividends are in 1099Div box 1b.

dalibellaAuthor

Thanks for the answer,

I do not have schedule D on turbo tax deluxe. These aren't capital gains, just qualified dividends. Vanguard bunches all dividends in one line and then in other lines specifies how much is qualified and how much is reits. I l looked at the 1040 and on line 3b lists the bunched ordinary dividends (including both qualified and reits ), while on line 3a lists just the qualified div. Now, when adding all income, it adds only whatever is on line 3b (the combined amount for all dividends). So, what happened to line 3a amount? How is it considered or will it be considered? It seems to be ignored as part of the total income, when it should be taxed at a lower rate. I am confused indeed.

VolvoGirl

Employee

I explained that. The tax is calculated a different way. There are over 7 ways to calculate the tax. It does use Schedule D even if it is not required for filing.

You can probably tell because the tax on 1040 will be less than the Tax Table

https://ttlc.intuit.com/community/forms/help/form-1040-line-11-amount-is-less-than-standard-irs-tax-table/00/25752

Bette5

I have the same problem. Seems like a software problem and no where to contact a technician.

BillM223

"I have the same problem." You have what problem? The champs above explained why dividends are handled the way they are - it's because TurboTax is following the IRS rules.

What would you want us to do differently?

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VolvoGirl

Employee

@BillM223 Can you ask TT if they can provide the IRS Tax Table Worksheet to show the actual tax calculations? That's been bugging me. Seems like it would be a simple thing to fill out the chart with the return's figures.

IRS Tax Table page 15 to calculate the tax and to compare to Turbo Tax. That isn't shown in Turbo Tax.
https://www.irs.gov/pub/irs-pdf/i1040tt.pdf