My only 2024 income is from qualified dividends. Subtracting my itemized deductions I see that my taxable income is 23,000. I am single. It is my understanding that since my income is below $44,800, I do not owe any tax. I know this would be true if the income was from capital gains. What I am wondering is if the same applies when the income is from qualified dividends.
Thank you!
Yes, qualified dividends are treated the same as long-term capital gain. For 2024 if you are filing as single there is no tax on qualified dividends or long-term capital gain if your taxable income is $47,025 or less.
Note that the lower tax rates for capital gain apply only to long-term capital gain. Short-term capital gain is taxed at the rates for ordinary income such as wages.
Yes, qualified dividends are treated the same as long-term capital gain. For 2024 if you are filing as single there is no tax on qualified dividends or long-term capital gain if your taxable income is $47,025 or less.
Note that the lower tax rates for capital gain apply only to long-term capital gain. Short-term capital gain is taxed at the rates for ordinary income such as wages.
Thank you.
If I understand correctly, this applies only to federal taxes. I believe I do owe Virginia State tax on the taxable amount. Is this correct?
Correct. For Virginia purposes, there is no special tax rate for capital gains or preferential treatment for qualified dividends.
Q. It is my understanding that since my taxable income (after deductions) is below $47,150 (2024), I do not owe any tax. I know this would be true if the income was from capital gains. What I am wondering is if the same applies when the income is from qualified dividends?
A. Yes. But, you are still required to file a federal (and probably state) income tax return because your total income is over $14,600 . Your tax will be calculated on the Qualified dividends and capital gains work sheet. Technically, that income is taxed at 0%. You will not qualify for the free edition of TurboTax.