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Did you have any qualified dividends? Or maybe you entered dividends as qualified by mistake? If you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from schedule D. The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet. It does not get filed with your return. In the online version you need to save your return as a pdf file and include all worksheets to see it.
The return had qualified dividends of $2,261. Box 3a and 3b each had the $2,261. No schedule D was created but I did see the qualified dividend and cap gain tax worksheet. So did the IRS not take into consideration qualified dividends when they calculated my tax amount?
Thank you for your help.
So did the IRS not take into consideration qualified dividends when they calculated my tax amount?
If I am interpreting things correctly (and I may not be) the IRS hasn't "said" anything yet. You're getting your figure from the tax tables - not from the IRS directly. The tax tables are basically for W-2 income, and the tax tables do not take into account things that may be taxed differently or at a different rate. So if you have things like qualified dividends, the tax tables are of no use for that income.
We received a letter saying there were changes to the tax return. They changed the amount of tax shown on return because amount entered was incorrect based on our taxable income and filing status. They said we are due an adjusted refund of $15 instead of the expected $216. Instead of tax amount of $15,209 their calculated tax amount was $15,410. I went to the tax table to do a manual calculation just to see if it matched their amount and it did. Did not factor in qualified dividends.
Yes, based on the amounts, that's what it sounds like happened. The IRS is saying your dividends were not qualified. One possible explanation: they did not receive a copy of your 1099-Div that shows $2261 in box 1b.
Review the IRS letter in detail and see if you can confirm this. Then verify that you have a 1099-DIV with an amount in box 1b. Then write back to the IRS and include a copy of your 1099-Div. Also include a copy of the qualified dividends and capital gains work sheet.
Thank you for all the responses.
We do have form 1099-divs from Schwab and Merrill that reports the qualified dividends.
The IRS notice CP12 makes no reference to any qualified dividends nor any reasons for the change in tax amounts.
I will give them a call this week and see if I can get through.
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