qualified dividends and long term capitol gains from mutual fund distributions

[kennn]

Looking at the my form 1040 lines 9b and 13, it looks that qualified dividends and long term capitol gains from mutual fund distributions are being included in my agi line 37 and my taxable income line 43. This was generated by filling in the fields as specified by the TaxAct software. However it is my understanding if you are in the 15 % tax bracket you would not pay taxes on qualified dividends or long term gains. Am I correct, and if so, how do I correct this discrepancy.

[kathyc2]

Looking at the my form 1040 lines 9b and 13, it looks that qualified dividends and long term capitol gains from mutual fund distributions are being included in my agi line 37 and my taxable income line 43. This was generated by filling in the fields as specified by the TaxAct software. However it is my understanding if you are in the 15 % tax bracket you would not pay taxes on qualified dividends or long term gains. Am I correct, and if so, how do I correct this discrepancy.

They are still taxable income, but the LTCG rate for those in the 15% marginal rate is zero.

[kennn]

They are still taxable income, but the LTCG rate for those in the 15% marginal rate is zero.

Not a tax professional buta Am I missing something, it goes from line 43 (taxable income) to line 44 (computed tax from tax table at the 15% , if in 15 percent bracket) not at zero which i would think would be appropriate. the ze.

[Roland Slugg]

See the worksheet for F-1040, line 44.

[FEDUKE404]

Income is not the same as tax on income

Not a tax professional buta Am I missing something, it goes from line 43 (taxable income) to line 44 (computed tax from tax table at the 15% , if in 15 percent bracket) not at zero which i would think would be appropriate. the ze.

You are confused over the difference between income (qualifying dividends and non-qualifying dividends and capital gains distributions ALL constitute "income") and the tax on the types of income.

As Roland Slugg already noted, look for the Qualified Dividends and Capital Gain Tax Worksheet associated with line 44 of Form 1040. (right click on folder?)

FE