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TY266
Returning Member

Why my qualified dividends tax rate is 24.3% when IRS document says max is 20%?

I couldn't find out why the discrepancy. Also the ordinary dividends tax rate is higher than the max 37% as well. Is there something I missed?

 

Thanks so much for your help! 

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2 Replies
FangxiaL
Expert Alumni

Why my qualified dividends tax rate is 24.3% when IRS document says max is 20%?

Qualified dividends are taxed at the long-term capital gain rate, up to 20% depending on your tax bracket. The average rate could be higher because the added dividends push more of your other income taxed at your marginal rate. I can not imagine what can cause the ordinary dividends to be taxed more than the maximum rate.

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Why my qualified dividends tax rate is 24.3% when IRS document says max is 20%?

see if there is form 8960 in your return. there is an additional 3.8% tax on net investment income tax that exceeds the threshold.

 

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