0% tax rate on qualified dividends -

[kkkkrause]

(Married filing Jointly

For TY 2024, the upper limit for 0% tax rate on qualified dividends is 94, 050.  

I am trying to manage my income (via conversions fro traditional to ROTH) to keep al my qualified dividends untaxed.  

My question is:  If I exceed the 94,050, all all qualified dividends subject to the 15 % rate or just those above the threshold.  

Searches on line have yielded conflicting answers.  Can anyone point me to the specific IRS publication where I can find out this answer?

[Mike9241]

it doesn't quite work that way

let's say $120,800 taxable income all ordinary including $90,000 of qualified dividends

$26, 750 of those qualified dividends will get taxed at 15%

in this oversimplified example, taxable income exceeds qualified dividends by $30,800

this $30,800 reduces the $94,050 threshold to $63,250

the $90,000 of dividends are over this amount by $26,750. 

this means that other income can push qualified dividends into a higher bracket.

to correctly see the effect of everything, you may need the desktop app which allows you to do as many what-ifs as you want but warning it's not fully updated for 2024

you might also search the web for a copy of the 2024 qualified dividends and capital gains worksheet

you can also download the 2023 schedule D instructions which contain this 2023 worksheet (2024 has not yet been published)

https://www.irs.gov/pub/irs-pdf/i1040sd.pdf 

certain lines would need to be updated to reflect the 2024 limits.