Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

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Topic Author
Carno
Posts: 109
Joined: Sat Jun 02, 2018 4:54 pm

Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by Carno » Thu Mar 14, 2019 10:46 am

In 2016, I reported on my 1040 9a Ordinary Dividends an amount form my Fidelity 1099-DIV line 1a Total Ordinary Dividends. I believe Fidelity 1099-DIV line 1a Total Ordinary Dividends includes Qualified Dividends that is reported in the next line as 1b Qualified Dividends. I believe I should have subtracted Qualified Dividends (1b) from the Total Ordinary Dividends (1a) on Fidelity 1099-DIV and reported the result (1a-1b) on Form 1040 9a Ordinary Dividends. Note Form 1040 9a Ordinary Dividends says Ordinary Dividends and not Total Ordinary Dividends. Is my understanding correct? Does Form 1040 Ordinary Dividends mean Total Ordinary Dividends or [Total Ordinary Dividends - Qualified Ordinary Dividends]?

HomeStretch
Posts: 2525
Joined: Thu Dec 27, 2018 3:06 pm

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by HomeStretch » Thu Mar 14, 2019 11:12 am

Carno wrote:
Thu Mar 14, 2019 10:46 am
In 2016, I reported on my 1040 9a Ordinary Dividends an amount form my Fidelity 1099-DIV line 1a Total Ordinary Dividends. I believe Fidelity 1099-DIV line 1a Total Ordinary Dividends includes Qualified Dividends that is reported in the next line as 1b Qualified Dividends.
Yes
Carno wrote:
Thu Mar 14, 2019 10:46 am
I believe I should have subtracted Qualified Dividends (1b) from the Total Ordinary Dividends (1a) on Fidelity 1099-DIV and reported the result (1a-1b) on Form 1040 9a Ordinary Dividends.
Dividends]?
No, you do not adjust 1099-DIV box 1a (total ordinary dividends). Enter the 1099-DIV boxes 1a and 1b amounts as reported. The tax software will compute the taxes owed on Box 1b amounts at capital gains rates and Box 1a-Box 1b at ordinary income tax rates. You can try doing your 1040/worksheets manually to see how this works.
[/quote]

Topic Author
Carno
Posts: 109
Joined: Sat Jun 02, 2018 4:54 pm

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by Carno » Thu Mar 14, 2019 11:17 am

HomeStretch wrote:
Thu Mar 14, 2019 11:12 am
Carno wrote:
Thu Mar 14, 2019 10:46 am
In 2016, I reported on my 1040 9a Ordinary Dividends an amount form my Fidelity 1099-DIV line 1a Total Ordinary Dividends. I believe Fidelity 1099-DIV line 1a Total Ordinary Dividends includes Qualified Dividends that is reported in the next line as 1b Qualified Dividends.
Yes
Carno wrote:
Thu Mar 14, 2019 10:46 am
I believe I should have subtracted Qualified Dividends (1b) from the Total Ordinary Dividends (1a) on Fidelity 1099-DIV and reported the result (1a-1b) on Form 1040 9a Ordinary Dividends.
Dividends]?
No, you do not adjust 1099-DIV box 1a (total ordinary dividends). Enter the 1099-DIV boxes 1a and 1b amounts as reported. The tax software will compute the taxes owed on Box 1b amounts at capital gains rates and Box 1a-Box 1b at ordinary income tax rates. You can try doing your 1040/worksheets manually to see how this works.
[/quote]
Thanks, but I do not use any software. I do all my taxes manually using my own Excel spreadsheet. Again, When I enter IRS 1040 9a Ordinary Dividends, I enter [Total Ordinary Dividends - Qualified Ordinary Dividends] from Fidelity 1099-DIV and NOT [Total Ordinary Dividends]. Is this correct?

HomeStretch
Posts: 2525
Joined: Thu Dec 27, 2018 3:06 pm

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by HomeStretch » Thu Mar 14, 2019 11:28 am

Form 1040 Line 3b amount = Form 1099-DIV box 1a amount.

2018 1040 line 3b. 2016 1040 line 9a.
Last edited by HomeStretch on Thu Mar 14, 2019 11:40 am, edited 2 times in total.

Topic Author
Carno
Posts: 109
Joined: Sat Jun 02, 2018 4:54 pm

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by Carno » Thu Mar 14, 2019 11:38 am

HomeStretch wrote:
Thu Mar 14, 2019 11:28 am
Form 1040 Line 3b amount = Form 1099-DIV box 1a amount.
Please note I do my taxes manually. 2018 1040 Line 3b is Ordinary dividends and Form 1099-DIV box 1a is Total Ordinary Dividends. Are you sure I report Total Ordinary Dividends as Ordinary dividends and not [Total Ordinary Dividends - Qualified Ordinary Dividends] as Ordinary dividends on 2018 1040 Line 3b? Or,
Form 1040 Line 3b amount = Form 1099-DIV box 1a amount - Form 1099-DIV box 1a amount 1b?

HomeStretch
Posts: 2525
Joined: Thu Dec 27, 2018 3:06 pm

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by HomeStretch » Thu Mar 14, 2019 11:52 am

See 2018 IRS Form 1040 instructions page 28 under section “Line 3B”.
Excerpt: “Enter your total ordinary dividends on line 3b. This amount should be shown in box 1a of Form 1099-DIV”.

cas
Posts: 695
Joined: Wed Apr 26, 2017 8:41 am

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by cas » Thu Mar 14, 2019 11:54 am

Carno wrote:
Thu Mar 14, 2019 11:17 am
Thanks, but I do not use any software. I do all my taxes manually using my own Excel spreadsheet. Again, When I enter IRS 1040 9a Ordinary Dividends, I enter [Total Ordinary Dividends - Qualified Ordinary Dividends] from Fidelity 1099-DIV and NOT [Total Ordinary Dividends]. Is this correct?
No, it is not correct. 2016 Form 1040 Line 9a includes both qualified and non-qualified dividends. But you probably shouldn't be believing strangers on the internet about this sort of thing, so...

Let's see ... google "2016 IRS 1040 Instructions filetype:pdf" and ... direct from the mouth of the IRS...
Line 9a Ordinary Dividends

Each payer should send you a Form 1099-DIV. Enter your total ordinary dividends on line 9a. This amount should
be shown in box 1a of Form(s) 1099-DIV.
Does your Excel spreadsheet use the Qualified Dividend and Capital Gain Worksheet to calculate the tax?

livesoft
Posts: 68111
Joined: Thu Mar 01, 2007 8:00 pm

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by livesoft » Thu Mar 14, 2019 12:06 pm

Carno wrote:
Thu Mar 14, 2019 11:17 am
Thanks, but I do not use any software. I do all my taxes manually using my own Excel spreadsheet. Again, When I enter IRS 1040 9a Ordinary Dividends, I enter [Total Ordinary Dividends - Qualified Ordinary Dividends] from Fidelity 1099-DIV and NOT [Total Ordinary Dividends]. Is this correct?
No that is NOT correct. Please read the IRS instructions. This is especially good advice for folks who do not use tax prep software, but is also good advice for folks who do use tax prep software: Please read the IRS instructions.
Wiki This signature message sponsored by sscritic: Learn to fish.

Topic Author
Carno
Posts: 109
Joined: Sat Jun 02, 2018 4:54 pm

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by Carno » Thu Mar 14, 2019 12:11 pm

cas wrote:
Thu Mar 14, 2019 11:54 am
Carno wrote:
Thu Mar 14, 2019 11:17 am
Thanks, but I do not use any software. I do all my taxes manually using my own Excel spreadsheet. Again, When I enter IRS 1040 9a Ordinary Dividends, I enter [Total Ordinary Dividends - Qualified Ordinary Dividends] from Fidelity 1099-DIV and NOT [Total Ordinary Dividends]. Is this correct?
No, it is not correct. 2016 Form 1040 Line 9a includes both qualified and non-qualified dividends. But you probably shouldn't be believing strangers on the internet about this sort of thing, so...

Let's see ... google "2016 IRS 1040 Instructions filetype:pdf" and ... direct from the mouth of the IRS...
Line 9a Ordinary Dividends

Each payer should send you a Form 1099-DIV. Enter your total ordinary dividends on line 9a. This amount should
be shown in box 1a of Form(s) 1099-DIV.
Does your Excel spreadsheet use the Qualified Dividend and Capital Gain Worksheet to calculate the tax?
Thanks, your are right! There goes another 1040X amended filing (underreported by about $1,300 as a result). You think this amount is large enough to trigger a notice from IRS?
As for my Excel spreadsheet, I customize all the rules and inputs, so I am responsible for the outcome (it does Qualified Dividend and Capital Gain Worksheet).

Topic Author
Carno
Posts: 109
Joined: Sat Jun 02, 2018 4:54 pm

Re: Total Ordinary Dividends, Ordinary Dividends, Qualified Dividends Confusion

Post by Carno » Thu Mar 14, 2019 1:42 pm

livesoft wrote:
Thu Mar 14, 2019 12:06 pm
Carno wrote:
Thu Mar 14, 2019 11:17 am
Thanks, but I do not use any software. I do all my taxes manually using my own Excel spreadsheet. Again, When I enter IRS 1040 9a Ordinary Dividends, I enter [Total Ordinary Dividends - Qualified Ordinary Dividends] from Fidelity 1099-DIV and NOT [Total Ordinary Dividends]. Is this correct?
No that is NOT correct. Please read the IRS instructions. This is especially good advice for folks who do not use tax prep software, but is also good advice for folks who do use tax prep software: Please read the IRS instructions.
Thanks, livesoft! I am sending an 1040X out today. :) Report the total of your ordinary dividends on line 9a of Form 1040. Such an obvious statement to miss! :(

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