1099-DIV

[wounded04]

I have a 1099-DIV which was the last form I entered on my return.  The dividend income is only about $2500.  Once the information was entered, my refund was reduced by almost $700.  Can you give any explanation for this?  My tax rate did not change hardly at all from before entry and after entry.   Thank you.

[Mike9241]

when income goes up a lot of other items on your return that reduce your taxes can go down.  we can't see the return.

probably the only way to tell is to compare the returns before and after the DIV is added. 

[SamS1]

Could be a number of factors but probably due to your marginal tax rate.  The marginal tax rate is the amount of additional tax paid for every additional dollar earned as income.  So assuming you are in the 24% tax bracket, and additional $2500 of income would result in additional tax of $600 ($2,500x.24) of Federal tax.  If you would also have additional state tax at the marginal state tax rate.   

On the 1099-DIV you received, if there is an amount on 1B, qualified dividends are taxed at the capital gains rate, probably 15%.  But if there is no amount in box 1B, all the dividends will be taxed at your marginal tax rate.

You can review your 1040 prior to paying through Tools.  You can review your 1040 in the following steps:

1. While in your TurboTax account, select Tax Tools in the left margin
2. Select Tools
3. Select View a Tax Summary
4. In the left margin, select Preview my 1040
5. Scroll down the screen and find line 15 Taxable income.

Compare that amount on line 15 to this chart to find your marginal rate.