In reviewing the 1040 Overview of my Turbo Tax results, I noticed that my Tax was calculated using the Qualified Dividends & Capital Gain Worksheet...is that normal?

[BMcCalpin · Accepted solution]

Yes, this is normal for many taxpayers.

If you have either capital gains or qualified dividends, then these income items are taxed at a different (generally lower) rate.

On the Qualified Dividends & Capital Gain Worksheet, the qualified dividends and capital gains are separated from the rest of your (ordinary) income, then each amount is taxed separately and then added back to the tax on the rest of the income.

At the bottom of the worksheet, the tax calculated on all the income by using the tax tables or ordinary tax rates is compared to the tax calculated by doing the qualified dividends and capital gains separately from ordinary income, and the smaller result is chosen for you.