Qualified Dividend tax

[emilyrm]

On one of my 1099-DIV statements, the Total Ordinary Dividends and the Qualified Dividends are the same amount (line 1a=1b).   Can I assume when I enter those into TurboTax, my taxes should only increase by 20% of the taxable amount?  It is going up 23.797%    I thought the amount for Qualified Dividends was capped at 20%. I there threshold that I am beyond or another reason?   Thank you very much in advance.

[baldietax · Accepted solution]

if you are in the 20% qualified div bracket then you are probably also in the zone for the Net Investment Income Tax of 3.8% which would give you 23.8%.  whenever you add more income there could other effects on your 1040 such as deductions phasing out and also penalties in the amount due to the Fed if you are just looking at the running total on the desktop version, so you need to look at effect on your 1040 as a whole line by line.

[emilyrm]

Thank you very much for explaining this!!!  I really appreciate it.