Get your taxes done using TurboTax

You have capital gains or qualified dividends.

 


While these two categories are added into Adjusted Gross Income and thus show up on line 8b of the 1040, they cause the tax computation to change, because ordinary income is taxed at one rate, and capital gains and qualified dividends are taxed at a lower rate.

The result is that when you have capital gains and/or qualified dividends, then the tax on line 12a is somewhat lower than it would have been in the tax tables.

Look for a Qualified Dividends and Capital Gains Tax Worksheet (Qual Div/Cap Gn) in your output forms which should explain how the tax was computed.

 

[Edited 3/20/2020 2:17 pm CDT - updated for 2019]

View solution in original post