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freef4709
New Member

If dividend is listed on box 1a and 1b which do I select?

 
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2 Replies

If dividend is listed on box 1a and 1b which do I select?

Box 1a is your total dividends you received. Box 1b is the part of your dividends that is considered Qualified and is taxed differently than ordinary dividends. They could be the same or different figures. You need to enter both boxes in TT so it can determine how much taxes you should be charged.

LindaS5247
Expert Alumni

If dividend is listed on box 1a and 1b which do I select?

What do you mean by "what one do you select"?  For what question?

You should be entering your Form 1099-DIV as it is shown.

 

Box 1 a is for Ordinary Dividends which are the total of all the dividends reported on a 1099-DIV form. Ordinary dividends are a share of a company's profits passed on to the shareholders periodically.

 

Ordinary dividends are taxed using the ordinary income tax brackets for tax year 2022.

 

Box 1b is for Qualified Dividends which are all or a portion of the total ordinary dividends.

 

For dividends to fall in the qualified dividend category, they typically must be paid by a U.S. corporation or a qualifying foreign corporation. Generally, you must also meet the holding period requirement.

The holding period for most types of qualified dividends requires you to have held the investment unhedged for more than 60 days during the 121-day period that starts 60 days prior to the ex-dividend date. An ex-dividend date is typically one day before the "date of record" or "record date." If you purchase a dividend generating investment on its ex-dividend date or after, you typically will not receive the next dividend payment. Generally, the holding period doesn't include the day you purchased an investment, but it does include the day you sold it.


Qualified dividend taxes are usually calculated using the capital gains tax rates. For 2022, qualified dividends may be taxed at 0% if your taxable income falls below:

  • $41,676 for those filing single or married filing separately,
  • $55,801 for head of household filers, or
  • $83,351 for married filing jointly or qualifying widow(er) filing status.

The qualified dividend tax rate increases to 15% for taxable income above

  • $41,676 through $258,600 for married filing separately filers,
  • $41,676 through $459,750 for single filers,
  • $55,801 through $488,500 for head of household filers, or
  • $83,351 through $517,200 for married filing jointly or qualifying widow(er) filers.
     

Per the Instructions for 1099-DIV:

Box 1a. Total Ordinary Dividends

Enter dividends, including dividends from money market funds, net short-term capital gains from mutual funds, and other distributions on stock. Include reinvested dividends and section 404(k) dividends paid directly from the corporation. Box 1a includes amounts entered in boxes 1b and 2e and it also includes the amount of the recipient's share of investment expenses that you report in box 6.

 

.An S corporation reports as dividends on Form 1099-DIV only distributions made during the tax year out of accumulated earnings and profits. See section 1368 for more information..

Box 1b. Qualified Dividends

Enter the portion of the dividends in box 1a that qualifies for the reduced capital gains rates. Include dividends for which it is impractical to determine if the section 1(h)(11)(B)(iii) holding period requirement has been met. See Qualified Dividends and the Caution, earlier.


If this does not help please feel free to come back to TurboTax Community with additional details or questions or click here for information on Turbo Tax Support.  You can connect with a Live TurboTax Agent and share your screen.

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