"Regardless of how tax is computed, using "Tax Computation Worksheet" or "Tax Table", they should result in the same value. Correct?" - No, not correct.
"Qualified Dividends and Capital Gain Tax Worksheet" is used to calculate the income when you have either qualified dividends or long term capital gains or both.
Why? Because qualified dividends and long term capital gains are not taxed the same way that ordinary income is. On that worksheet, what it does is to remove the dividends and gains from the income on line 15 (1040), and then it calculates the income tax on the remainder using the Tax Tables, and applies the different tax rates to what was taken out. The qualified dividend and long term capital gains fall into one of only three tax brackets; 0%, 15%, and 20%.
Then the two taxes are added back together. This is why line 16 is not the same as what you get when you apply the Tax Tables to line 15. There are several other mechanisms for calculating tax (see the check boxes on line 16), but the method for qualified dividends and long term capital gains is far and away the most common after using the Tax Tables.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
