cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
New Member

If my taxable income is $5000, why is my tax showing $0? Should it not be 10% or $500?

If my taxable income is $5000, why is my tax showing $0? Should it not be 10% or $500?

1 Best answer

Accepted Solutions
Highlighted
Level 3

If my taxable income is $5000, why is my tax showing $0? Should it not be 10% or $500?

If your total income was less than $38,600 and your qualified dividends were $5,000 (or whatever the exact number for your taxable income was) then you would be taxed at a 0% rate.

Qualified dividends are removed from your taxable income and taxed at their own rate, then whatever is left over is taxed at your regular rate.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

3 Replies
Highlighted
Level 15

If my taxable income is $5000, why is my tax showing $0? Should it not be 10% or $500?

Any capital gains or qualified dividends?
Highlighted
New Member

If my taxable income is $5000, why is my tax showing $0? Should it not be 10% or $500?

yes
Highlighted
Level 3

If my taxable income is $5000, why is my tax showing $0? Should it not be 10% or $500?

If your total income was less than $38,600 and your qualified dividends were $5,000 (or whatever the exact number for your taxable income was) then you would be taxed at a 0% rate.

Qualified dividends are removed from your taxable income and taxed at their own rate, then whatever is left over is taxed at your regular rate.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post