TurboTax may be using the Qualified Dividends and Capital Gains Worksheet to calculate your tax liability. To be sure of what worksheet you need to check, look at your Form 1040/1040SR Wks. The tax computation is on the Tax Smart Worksheet that is located between Line 15 and Line 16. If A1 is checked, your tax liability came from the tax tables. But if any other line has a checkmark, you will have to go to the corresponding worksheet to see the tax calculation.
Some income is taxed at different rates (Qualified Dividends/Long-Term Capital Gains are taxed at a lower rate than ordinary income). In the example below, the tax calculation comes from the Schedule D Worksheet (Line A3 has the X), so you would need to find that worksheet to see the details of how your tax liability was calculated.
Thank you. As a retired senior, my income was taxed at 12.5% which is below the 28% for Capital gains and qualified dividends. Is that correct?
The 28% capital gains tax rate applies only to collectibles. All other long-term capital gains are taxed at either 0%, 10%, or 20% depending on your taxable income and filing status.
The following TurboTax article will explain this in greater detail:
I believe their may be an error in the turbo tax computation of qualified dividends on my submission to the IRS. To verify if this is correct and further taxes are not due I need a copy of the tax computation in order to see if this item was included with my original submission. This is not available with the forms on line. Please contact me as soon as possible to verify. Phone is [phone number removed], cemail :[email address removed] Thanks,William P.
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