Does 1099-Div box 1a and 1b are the same? When I entered the div. from box 1a, my Federal tax due changes. Then I entered box 1b, my Fed tax due changes again - TWICE?

[Rachel_W]

No, Boxes 1a and 1b are not the same.  Box 1a reports the "Ordinary Dividends" paid to you.  Box 1b designates which part of the dividends in Box 1a are considered "Qualified Dividends".  This is because the portion of your Dividends that are deemed "Qualified Dividends" are taxed at a lower tax rate.

Although it may appear that your Qualified Dividends are being taxed twice they are not.  The amount of your "Qualified" Dividends are separated out so that they can be taxed at the preferential capital gains tax rate.  When you have Qualified Dividends and Long-Term Capital Gains, your tax is calculated on the Qualified Dividends and Capital Gains Worksheet.

If you entered your Form 1099-Div Box 1 only, your tax liability would increase.  After entering Box 1b, your tax liability would decrease.

Please comment below if this doesn't answer your question so that I can assist you further.

[maria2]

Ok, I got it.  Except, before i enter the 1099 DIV, my Fed. Refund box said $715.
1.  I entered the div amount in box 1a, my Refund box went down to $603 -  that's ok.
2.  But when I entered the div amount in box 1b ( exact same amount as in 1a), now I have a Federal Tax Due of $44.
This doesn't make sense to me.

[Rachel_W]

Do you have anything in Box 2a?

[Rachel_W]

My shift ends at 9pm, but if you don't have anything in Box 2a you can send me a Diagnostic Copy of your Return so I can try to recreate what you just described.  To send a Diagnostic Copy, you will need to click "Online" from the top left of your screen and then "Send Tax File to Agent".  

[maria2]

i just sent it.

[maria2]

Nothing in box 2a

[Rachel_W]

Please put the token# in the comment box and I will check it when I get in tomorrow afternoon.

[maria2]

#456204

[Rachel_W]

I was able to recreate exactly what you described above when adding the Qualified Dividends your refund actually goes down.  Your Tax Liability (Line 44 of 1040) actually decreases by $1,856 when you add the Qualified Dividends; however; your Alternative Minimum Tax (AMT) actually goes up by $1,980 at the same time (Line 45 1040), resulting in a net decrease to your refund of $124.  See Form 6251 for the AMT calculation.  You can also check out this TurboTax FAQ: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1899184-what-is-the-alternative-minimum-tax-amt">https://ttlc.intu...>

[maria2]

i understand AMT, it still does not make sense that the amount in box 1a did not trigger AMT but 1b does.  It should be at the very least similar because bottom line is : I have a +$2900 dividend.  The amount in box 1b is an amount that qualified to a lower tax rate.

[Rachel_W]

I agree, the AMT is very confusing.  I recommend that you put your 1099DIV in with AND without the Qualified Dividends amount and then view/print your tax forms each way and compare them side by side. Pay particular attention to your Form 6251 and related worksheet along with the Qualified Dividends and Capital Gains Tax Worksheets.

[maria2]

Hi;
Thank you for the help.  
I posted 2 more questions (unrelated to this issue) it's about ISO and Split home office ded.  And no one has respond.   Would you be able to help me with those questions?