Question on ordinary and qualified dividends on 1099-DIV

[rvhatcher]

The 1099-DIV looks like this.  My question is: Is line 1b a subset of line 1a, or are they two different things?  Should I read this as I have $3413 in total dividends of which $613 are qualified, or should I read this that I have $3413 of ordinary and $613 of qualified for a total of $4026 in dividends?

The reason I ask is that when I entered line 1a TT showed me an estimated tax owed of $x, but when I put in the qualified amount it showed me an estimated tax owed of less than $x.

[rogge1722]

1b is a subset of 1a.

[Mike9241]

none of the above. $3413 of dividends of which $613 qualify for a special rate and an additional $980 of capital gains dividends which get the same preferred rate as qualified dividends.

[VolvoGirl · Accepted solution]

Yes box 1b is the part of 1a that is qualified.  They get taxed at a lower rate.

 Even though the full amount shows up in the total income on the 1040 line 7, 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 the worksheets to see it.

For the Desktop version you can switch to Forms Mode and open the worksheet to see it. Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.

[DMarkM1]

Yes, 1b is a subset of 1a.  If there is no amount on line 1b then all the dividends on line 1a are taxed at ordinary income rates.  If there is an amount on 1b those are taxed at long term capital gains rates.  The difference between lines 1a and 1b is taxed at ordinary income rates.