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▷▷ 2021 ▷ What is a qualified dividend spreadsheet?

4 julio, 2021


You may be happy that you have invested in all the stocks you may have and hope to keep smiling as you head to the bank while collecting your dividends. However, the IRS is anxiously waiting for you to not report your income so it can impose heavy penalties on you. Ignorance is not a legal defense, so even if you claim that your investment manager is to blame for tax evasion, the IRS won’t care; He showed no mercy to Nicolas Cage, who had to pay $ 6 million for the unpaid tax bill, plus fines and penalties. So before you get in trouble with the IRS for not reporting your dividend income, we’ll tell you what to do and one thing you need to fill out is the qualified dividend worksheet.

All about the Qualified Dividend Worksheet

If you’ve never found a qualified dividend spreadsheet, the IRS shows what it looks like; its full name is “Dividend and Capital Gains Tax Qualified Worksheet – Line 11a”. In short, it is known as Form 1040-Line 11a, and even before you try to fill in the many blanks, you are supposed to have completed Form 1040 up to line 10. However, the qualified dividend worksheet has 27 lines you have to calculate your taxes and you may not understand what each figure is trying to get to, but Marotta on Money makes it easy for us.

The resulting tax amount that you are supposed to have calculated on Form 1040 up to line 10 has included qualified dividends and long-term capital gains. Since they are taxed at a different rate, you need to separate them from your total income, so the figure you get on line 6 is your total qualified income, that is, the sum of your qualified dividend income and your capital gain. From lines 8-11, you will calculate the total qualified untaxed income to find out what income is taxed at 0%. Then, the taxable qualified income is calculated from lines 12-14 and from lines 15-19, the amount of qualified income that will be taxed at 15% is determined by the resulting figure on line 19.

As you continue with the math, you will come to line 23, the income taxed at 20%, and since you are interested in knowing the amount of the tax itself, line 20 will list the tax amount at 15%. The total amount of qualified income tax; therefore, it is the sum of lines 20 and 23 while line 24 shows the income tax due, therefore, on line 25, the amount shown is the total tax. Line 26 asks you to redial line 1, and if the amount is less than $ 100,000, you must use the Tax Table to find out what you owe, but if it is more than $ 100,000, then you will have to use a worksheet. calculating taxes. Finally, on line 27, compare the amounts on line 25 and line 26 and enter the lesser amount, which is the tax on all taxable income.

How do you know if your dividend is qualified?

Turbo Tax describes a method to qualify your dividends and that is that you must have held the shares of the company for more than 60 days from the 60 days prior to the date of the ex-dividend. Alternatively, the shares you own must be traded on the US stock exchange, a US corporation must pay for them, and if they are from a foreign company, that company must have a treaty with the US.

The amount of income that is used as a cap when setting the tax rate has continued to change over the years. Starting in 2020, you can only file in the 0% tax bracket if you are single and your income is less than $ 40,000. Also, if you are married with an income of less than $ 80,000 and choose to file a joint tax return with your spouse, you qualify for the 0% tax rate. Finally, it also applies if you are the head of the household and earn less than $ 53,600. However, once the income increases, so does the tax rate, and you will be charged a 15% tax if you are single and earn $ 441,449. Heads of household who earn $ 469,049 and married taxpayers who opt for joint returns and earn $ 496,599 will also be taxed at 15%. Any amount of income on the parentheses is charged at 20% for each of the categories.

Why the worksheet was provided

The IRS introduced the Capital Gains Tax and Qualified Dividends Worksheet as an alternative to Schedule D and added the qualified dividends and new rates to the Capital Gains Worksheet in 2003. Forms 1040 and 1040A, for thus, they help investors to take advantage of …



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