Tax on Qualified Dividends

[DocBlitzen]

My gross income (married/joint) was $92,000, including qualified dividends of $1000. The lower limit for income for the qualified dividends to be taxed is $94,050. Thus, there should be no tax on the $1000. Yet Turbotax is including it as taxable--even though it WAS listed as "qualified." There seems to be an error, and now I'm stuck with what to do.

[VolvoGirl · Accepted solution]

There are like 7 different ways to calculate the tax.
It depends what kind of income you have. 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. And you will need to use this IRS worksheet on page 15.
https://www.irs.gov/pub/irs-pdf/i1040tt.pdf