How TurboTax Uses Your Dividend Adjustment Amount
TurboTax assumes you want to adjust the total income from dividends and capital gain distributions reported on your 1099-DIV by the dividend adjustment amount you enter. If that is NOT how you want to handle this adjustment, select Back, adjust the amount of each separate income item, and uncheck the adjustment choice. Be sure to attach a statement to your return explaining each adjusted amount.
Examples:
-You entered $1,000 of ordinary dividends (box 1a), $1,000 of qualified dividends (box 1b), and an adjustment amount of $100. Both ordinary dividends and qualified dividends will be reduced by $100 to $900.
- You entered $1,000 of ordinary dividends (box 1a), $800 of qualified dividends (box 1b), and an adjustment amount of $100. Ordinary dividends will be reduced by $100 to $900. Qualified dividends will be reduced by $80 ($800/$1,000 x $100) to $720.
-You entered $1,000 of ordinary dividends (box 1a), $1,000 of qualified dividends (box 1b), $500 of capital gain distributions (box 2a), and an adjustment amount of $100. TurboTax will add together the $1,000 of ordinary dividends and $500 of capital gain distributions to determine the total amount of income ($1,500) to adjust. Both ordinary dividends and qualified dividends will be reduced by $67 ($1,000/$1,500 x $100) to $933. Capital gain distributions will be reduced by $33 ($500/$1,500 x $100) to $467.
- You entered $1,000 of ordinary dividends (box 1a), $800 of qualified dividends (box 1b), $500 of capital gain distributions (box 2a), and an adjustment amount of $100. TurboTax will add together the $1,000 of ordinary dividends and $500 of capital gain distributions to determine the total amount of income ($1,500) to adjust. Ordinary dividends will be reduced by $67 ($1,000/$1,500 x $100) to $933. Qualified dividends will be reduced by $53 ($800/$1,500 x $100) to $747. Capital gain distributions will reduced by $33 ($500/$1,500 x $10) to $467.
