I make about $13,500 in dividends from Mutual funds I own. If I am over the 15% tax bracket by about $2,000, do I have to pay the whole 15% tax on the $13,500 dividend income? Or is it prorated and I pay 15% on the $2,000 and the rest gets taxed at 0%?
Because you have Qualified dividends (and/or long term capital gains), you cannot just look up your taxable income in the tax table, to determine your tax. You must use the Qualified dividends and capital gains worksheet