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Returning Member

How should 1099-DIV 1a and 1b fields be reflected in 1040 3a and 3b field? 1099-DIV 1a says Total Ordinary Dividends including 1b (Qualified Dividends), should 3b=1a-1b?

The wording is confusing on my 1099-DIV form. Field 1a says Total Ordinary Dividends (Includes amount shown in box 1b). Whereas 1b is Qualified Dividends. I understand that Ordinary Dividends are tax as normal income rate, whereas Qualified Dividends are taxed at a lower rate.

I verified that the amount in field 1a is the total amount of dividends I received during the year.

Why does the field say Ordinary Dividends but includes Qualified Dividends?

Assuming the my broker gave me a 1099-R with 1a field says $100 and 1b field says $50, do I pay normal income tax on only $50 and capital gain tax on the other $50?

Right now, TurboTax is processing it as I pay normal income tax on the entire $100 and no capital gain taxes.
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Accepted Solutions
Level 15

How should 1099-DIV 1a and 1b fields be reflected in 1040 3a and 3b field? 1099-DIV 1a says Total Ordinary Dividends including 1b (Qualified Dividends), should 3b=1a-1b?

You said 1099R but you meant 1099Div, right?

 

Yes the qualified dividends in box 1b are the part (or all) of box 1a dividends.  You might not be able to tell it is being taxed differently on your tax return.  If you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from Schedule D.  The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet.  It does not get filed with your return.  In the online version you need to save your return as a pdf file and include all the worksheets to see it.

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2 Replies
Level 15

How should 1099-DIV 1a and 1b fields be reflected in 1040 3a and 3b field? 1099-DIV 1a says Total Ordinary Dividends including 1b (Qualified Dividends), should 3b=1a-1b?

You said 1099R but you meant 1099Div, right?

 

Yes the qualified dividends in box 1b are the part (or all) of box 1a dividends.  You might not be able to tell it is being taxed differently on your tax return.  If you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from Schedule D.  The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet.  It does not get filed with your return.  In the online version you need to save your return as a pdf file and include all the worksheets to see it.

View solution in original post

Returning Member

How should 1099-DIV 1a and 1b fields be reflected in 1040 3a and 3b field? 1099-DIV 1a says Total Ordinary Dividends including 1b (Qualified Dividends), should 3b=1a-1b?

Thanks for the quick response! Yes I did mean 1099-DIV.

 

I did not know I could download and see all the worksheets. Looking through all that, it does seem that the TurboTax is calculating the qualified dividends at the capital gain tax rate. Reading just 1040 does make it all seem like the entire dividends is getting taxed as ordinary income...

 

Thanks for your help!

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