Trying to find out why Turbo Tax is calculating $0 tax due on $9000 of taxable income.

[kborrelli2000]

Turbo Tax is calculating $0 tax owed on $9000 of taxable income.  No capital gains, actually claiming $3000 capital losses.  Income is taxable social security, IRA withdrawls, and dividend interest.  Tax owed should be around $800.

[AnnetteB6]

Even though you mentioned that there are no capital gains included in your taxable income, if the dividend income is qualified dividends, then the income tax could still be calculated at the lower capital gains rate instead of using the tax tables for the calculation.  

When the Qualified Dividends and Capital Gains Worksheet is used to calculate income tax, your income is broken down into certain categories.  Long-term capital gains and qualified dividends are separated from other income and taxed at lower rates.

Going through that worksheet one line at a time would show how the total tax was calculated.

If you are using one of the CD/downloaded versions of TurboTax, you can find the worksheet by going to Forms Mode.  Click Forms in the upper right corner of the screen.  Then, look for Qual Div/Cap Gn in the list on the left side of the screen.

If you are using TurboTax Online, you will need to pay for your return and then print or preview the return to find the worksheet.

[kborrelli2000]

Thank you for responding, only 10% of the dividends are qualified and no capital gains.  It's just bizarre that the tax is $0.  I could see it being different than I figured based on type of income...but it shouldn't be $0

[JohnB5677]

You can preview your taxes online prior to paying for them.  If you look at the detail in the return you may be able to detect the reason for what you think may be a discrepancy.  If you have a copy of your 2021 tax return it may be valuable to do a comparison.  The line numbers for 2021 are the same as 2022.

1. On the menu bar on the left that shows.
   1. My Info
   2. Federal
   3. State
   4. Review
   5. File
2. Select Tax Tools
3. On the drop-down select Tools
4. On the popup menu
5. Select View Tax Summary
6. On the left sidebar
7. Select Preview my 1040.

Line 15 - Taxable Income

Line 24 - Total Tax.

Line 25 - Withholdings.

Line 33 - Payments including Credits.

Line 34 - Overpayments.

Line 37 - Tax owed.

To return to the entry screens press Back on the sidebar.

If this does not completely answer your question, please contact us again and provide some additional details.