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posted Feb 25, 2024 10:31:50 AM

1099-div entry increased tax owed by same amountwhen entering the 1099 – DIV into TurboTax, Premier

when entering the 1099 – DIV into TurboTax, Premier 2023 in the correct location for entering that form. The amount I owed in taxes increased for the exact amount that I entered. Doing further research I understand I was only supposed to be taxed 15% of that amount not the entire amount. Can someone explain this?

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Expert Alumni
Feb 25, 2024 11:02:34 AM

No, I can't give you a full explanation without having access to your tax information. I can tell you that the changes in the amount of income on your tax return can have surprising effects.

 

It is true that the maximum tax rate for qualified dividends is 15%, but extra income can change other factors on your tax return. 

 

Here are just a few examples:

 

  • Adding even a modest amount of income can push you over the threshold for claiming certain deductions and credits. 
  • Adding income can push you into a higher tax bracket.
  • Adding qualified dividends can trigger the Net Investment tax.
  • Adding extra income can trigger the Alternative Minimum Tax..
  • If you have Social Security benefits that are partially taxable, adding extra income will increase the amount of your Social Security benefits that is taxable.

 

If you want a more detailed explanation, please provide more details about what else is on your tax return.