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Level 3

IRS found an error in my return and sent me money

To my surprise, the IRS sent me a reimbursement on my tax return because, they stated, "the tax rates on Qualified Dividends and Capital Returns are generally lower than the standard rates. It appears your tax was not computed using these rates or the amount of tax was computed incorrectly. (211D)"

 

Since my dividend and capital returns information were entered automatically from my Vanguard accounts and then computed using my TurboTax,  why would TurboTax use tax rates the IRS says are too high? 

1 Reply
Level 20

IRS found an error in my return and sent me money

That is due to an IRS error on the qualified dividends and capital gains tax worksheet in IRS publications that the IRS set out a notice in May.    TurboTax has been updated to correct that IRS error but if you filed prior to that then the IRS will correct it and send an additional refund.

 

See:  https://www.irs.gov/forms-pubs/error-in-qualified-dividends-and-capital-gain-d-tax-worksheet-in-pub-...

 

https://www.journalofaccountancy.com/news/2019/may/irs-corrects-error-schedule-d-tax-calculation-wor...