Estimated Tax Calculations

[TaxPayerAnonymous]

Re: The interview for adjusting 2023 income for estimated tax payments (and the Estimated Tax worksheet):

Assume I want to use 2022 numbers for estimated dividends for 2023.  The interview asks for Qualified Dividends  (which is line 1b on 1099-DIV).  Later, it asks for "all other income", without asking for "total dividends" or "ordinary dividends".  Should I enter the amount from line 1a of 1099-DIV, even though it includes the qualified dividends already entered?  I am NOT asking about what to enter for 2022 tax return.

[MonikaK1]

When using the W-4 and estimated taxes section of TurboTax, it asks you to estimate your Qualified Dividends in the Capital Gains and Losses section, because those dividends will be taxed at your Capital Gains rate. 

In the "other income and losses" box, include dividends that are not Qualified Dividends, along with interest income, retirement income, and other items not listed elsewhere in the calculation. 

The Learn More links next to these questions contain explanations as to what to enter in the box provided.

[TaxPayerAnonymous]

So if I am using 2022 1099-DIV for my estimates, and only boxes 1a and 1b had entries, then I would subtract box 1b from 1a to get the amount of dividends to put in the other income box (along with other types)?  In other words, you are saying the qualified dividends would be double counted if I put the 1a box full amount into the "other income" box? 

My question is not addressed at all in the Learn More link.  Is there a link to suggest changes to Intuit?

[ThomasM125 · Accepted solution]

You are correct, since line 1(a) includes the amount on line 1(b), you would subtract that amount from line 1(a) when entering other income not already reported, since you already reported the line 1(b) amount.

[Michael CA]

It sounds like a reasonable assumption to leave off qualified dividends for "Other Income and Losses", but I don't think that's correct!

I'm right now using TT2023 to estimate taxes for 2024.

The workflow for estimating taxes is asking for "Other Income and Losses" for 2024, and shows me what that income was in 2023 next to it, as a comparison.

The number it shows for 2023 is what I made in interest (2b on 1040) and ALL dividends (3b on 1040), including qualified dividends!

In 2023, I only made income in form of interest, dividends and capital gains, so it's easy to follow the calculation.

This tells me that either:

1) TT expects all dividends in "Other Income and Losses"

OR

2) TT displays the wrong number for the previous year for that entry.

I'm still not sure what the correct input is.

[Mike9241]

there should be an ES & W4 worksheet with a column to enter 2024 estimate amounts 

one line is for qualified dividends

[MODS] there is a mislabeling in desktop deluxe on the line right under other income on this form

it says "total of your other taxable income and losses."

in fact it should be "total of your taxable income and losses excluding the amount on line 7 (capital gain/losss) on 1040". Thus it includes dividend income both qualified and nonqualified. 

or put another way line 11 of 1040 less line 7 of 1040 (a loss on line 7 is added to line 11)

[Michael CA]

Thanks @Mike9241 .
Your answer makes sense, it matches what TurboTax puts into the prior year column.
So qualified dividends are essentially included in two separate fields!
Once under "Qualified dividends", and once under "Total of your other taxable income and losses" (as it's labeled in the worksheet) / "Other Income and Losses" (as it's labeled in the Estimated Taxes EasyStep Workflow).

[Mike9241]

yes. i saw the same thing qualified dividends are included on both lines. OP who thought that line should exclude qualified dividends because it was entered above have probably underpaid their estimates.