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Level 1

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?

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Level 8

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.

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3 Replies
Level 20

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?
Level 1

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

yes
Level 8

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