AnnieR Posted April 8, 2010 Report Share Posted April 8, 2010 I am preparing a return and am totally confused. Client's agi is $65,000, last year's was 67,000. The only large difference in the two returns is interest and dividends, last year 4700 of ordinary dividends, 7595 of qualified, int of 1181, this year is 617 of ordinary div, 500 of qualified and $173 int. Last year, with higher agi, tax was 5054, this year tax is $5683 on less income. Can anybody please explain? Other income was rental, pensions and w-2, nothing particularly different. AnnieR Quote Link to comment Share on other sites More sharing options...
OldJack Posted April 8, 2010 Report Share Posted April 8, 2010 I am preparing a return and am totally confused. Client's agi is $65,000, last year's was 67,000. The only large difference in the two returns is interest and dividends, last year 4700 of ordinary dividends, 7595 of qualified, int of 1181, this year is 617 of ordinary div, 500 of qualified and $173 int. Last year, with higher agi, tax was 5054, this year tax is $5683 on less income. Can anybody please explain? Other income was rental, pensions and w-2, nothing particularly different. AnnieR Its the difference in qualified dividends taxed at capital gains rate. Previous year larger qualified dividend (7595) capital gains calculation produced less tax than current year qualified gains (500). Quote Link to comment Share on other sites More sharing options...
rich Posted April 8, 2010 Report Share Posted April 8, 2010 I am preparing a return and am totally confused. Client's agi is $65,000, last year's was 67,000. The only large difference in the two returns is interest and dividends, last year 4700 of ordinary dividends, 7595 of qualified, int of 1181, this year is 617 of ordinary div, 500 of qualified and $173 int. Last year, with higher agi, tax was 5054, this year tax is $5683 on less income. Can anybody please explain? Other income was rental, pensions and w-2, nothing particularly different. AnnieR Check this another todays topic ATX tax calculation not working properly .I found very good info there. Quote Link to comment Share on other sites More sharing options...
grandmabee Posted April 8, 2010 Report Share Posted April 8, 2010 I am preparing a return and am totally confused. Client's agi is $65,000, last year's was 67,000. The only large difference in the two returns is interest and dividends, last year 4700 of ordinary dividends, 7595 of qualified, int of 1181, this year is 617 of ordinary div, 500 of qualified and $173 int. Last year, with higher agi, tax was 5054, this year tax is $5683 on less income. Can anybody please explain? Other income was rental, pensions and w-2, nothing particularly different. AnnieR look at the tab at bottom of 1040 to see the tax calulation. it shows you a break down of what is taxed cg rate and what is at regualar rate Quote Link to comment Share on other sites More sharing options...
Kimberly K Posted April 9, 2010 Report Share Posted April 9, 2010 Old Jack is exactly right on this! The qualified dividends will lower the tax, years back I had the wife of the Vice President of the college in town obsess over this very same thing. Once I printed out the worksheet that showed the calculations, I set her at ease. Quote Link to comment Share on other sites More sharing options...
AnnieR Posted April 9, 2010 Author Report Share Posted April 9, 2010 Old Jack is exactly right on this! The qualified dividends will lower the tax, years back I had the wife of the Vice President of the college in town obsess over this very same thing. Once I printed out the worksheet that showed the calculations, I set her at ease. Thank you, I printed out last year's worksheet and figured out the difference. And Old Jack, you are a treasure. AnnieR Quote Link to comment Share on other sites More sharing options...
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