MonikaK1
Expert Alumni

State tax filing

First - If you are entering a Form 1099-R because you withdrew any funds from a retirement account, regardless of your age, TurboTax will ask questions to determine whether the amount is taxable and whether it is subject to the 10% early withdrawal penalty. Be sure to enter information in the correct form.

 

See here for information from Pennsylvania, where most types of retirement income are not taxed.

 

Second - if you didn't make duplicate entries for Forms 1099-DIV, what you are seeing may be because some of your dividends are treated differently because they are tax-exempt interest dividends. Be sure to enter all of the information on your Forms 1099-DIV.

 

Third - Reinvested dividends are taxed when earned and then added to your cost basis in the investment for capital gains purposes.

 

For example, you invested $1,000 in a mutual fund and have earned and reinvested $50 in dividends. As a result, your cost basis is $1,050. If you sell all of your fund shares for $1,110, your taxable capital gain would be $60, not the $110 difference between what you originally paid for the fund shares and your selling value.

 

See this TurboTax article for more information on the taxation of dividends.

 

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