How can I figure out if my accountant reported my qualified dividends correctly?

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Joe_R95
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How can I figure out if my accountant reported my qualified dividends correctly?

Post by Joe_R95 » Thu Mar 26, 2020 1:34 am

The title pretty much says it all. I have a lot of forms that were filled out, but I don't see a Qualified dividend and taxable gain worksheet. Is there a way to tell if it was done correctly somewhere? The Schedule B shows the full amount as ordinary dividends, but that and form 1040 are all I have that shows dividends. Thanks

nalor511
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by nalor511 » Thu Mar 26, 2020 1:57 am

https://www.irs.gov/faqs/interest-divid ... end-income

Answer

Enter the ordinary dividends from box 1a on Form 1099-DIV, Dividends and Distributions on line 3b of Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors (PDF) or on line 10a of Form 1040-NR, U.S. Nonresident Alien Income Tax Return.

Enter any qualified dividends from box 1b on Form 1099-DIV on line 3a of Form 1040 or Form 1040-SR or on line 10b of Form 1040-NR.

Topic Author
Joe_R95
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by Joe_R95 » Thu Mar 26, 2020 2:32 am

nalor511 wrote:
Thu Mar 26, 2020 1:57 am
https://www.irs.gov/faqs/interest-divid ... end-income

Answer

Enter the ordinary dividends from box 1a on Form 1099-DIV, Dividends and Distributions on line 3b of Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors (PDF) or on line 10a of Form 1040-NR, U.S. Nonresident Alien Income Tax Return.

Enter any qualified dividends from box 1b on Form 1099-DIV on line 3a of Form 1040 or Form 1040-SR or on line 10b of Form 1040-NR.
Right, but if I'm not mistaken there has to be a way qualified dividends are treated differently in a form somewhere otherwise it just gets added in to your ordinary income on the 1040 and taxed at your regular rate instead of 15%

nalor511
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by nalor511 » Thu Mar 26, 2020 2:35 am

It goes on that line in the 1040 and is then treated appropriately in the tax tables, this is not the kind of thing shown in a worksheet. If you want to check your accountant's work, mock it up in hr block or your preferred tax software.

sport
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Location: Cleveland, OH

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by sport » Thu Mar 26, 2020 3:00 am

nalor511 wrote:
Thu Mar 26, 2020 2:35 am
It goes on that line in the 1040 and is then treated appropriately in the tax tables, this is not the kind of thing shown in a worksheet. If you want to check your accountant's work, mock it up in hr block or your preferred tax software.
I believe not. The taxes are calculated using the capital gains and qualified dividends worksheet.

Swansea
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by Swansea » Thu Mar 26, 2020 5:46 am

sport wrote:
Thu Mar 26, 2020 3:00 am
nalor511 wrote:
Thu Mar 26, 2020 2:35 am
It goes on that line in the 1040 and is then treated appropriately in the tax tables, this is not the kind of thing shown in a worksheet. If you want to check your accountant's work, mock it up in hr block or your preferred tax software.
I believe not. The taxes are calculated using the capital gains and qualified dividends worksheet.
That's the worksheet which drove me to a tax preparer...I found it quite difficult.

sd323232
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by sd323232 » Thu Mar 26, 2020 5:51 am

Joe_R95 wrote:
Thu Mar 26, 2020 2:32 am
nalor511 wrote:
Thu Mar 26, 2020 1:57 am
https://www.irs.gov/faqs/interest-divid ... end-income

Answer

Enter the ordinary dividends from box 1a on Form 1099-DIV, Dividends and Distributions on line 3b of Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors (PDF) or on line 10a of Form 1040-NR, U.S. Nonresident Alien Income Tax Return.

Enter any qualified dividends from box 1b on Form 1099-DIV on line 3a of Form 1040 or Form 1040-SR or on line 10b of Form 1040-NR.
Right, but if I'm not mistaken there has to be a way qualified dividends are treated differently in a form somewhere otherwise it just gets added in to your ordinary income on the 1040 and taxed at your regular rate instead of 15%
Did you hold stock long enough per below statement:

"To qualify for the qualified dividend rate, the payee must own the stock for a long enough time, generally 60 days for common stock and 90 days for preferred stock."

If yes, you will be taxed at 15%, if not, it will be taxed as income.

rkhusky
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by rkhusky » Thu Mar 26, 2020 6:50 am

If this is for the 2019 1040, calculate the tax on the Taxable Income (Line 11b) using the tax tables (pg 62 in the 1040 instructions) or the Tax Computation Worksheet (pg 74). If it matches the tax on Line 12a, then all your income was taxed as income, not qualified dividends or capital gains.

Topic Author
Joe_R95
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by Joe_R95 » Thu Mar 26, 2020 7:15 am

rkhusky wrote:
Thu Mar 26, 2020 6:50 am
If this is for the 2019 1040, calculate the tax on the Taxable Income (Line 11b) using the tax tables (pg 62 in the 1040 instructions) or the Tax Computation Worksheet (pg 74). If it matches the tax on Line 12a, then all your income was taxed as income, not qualified dividends or capital gains.
Thank you, this did the trick. I still have no idea where the calculations were made, but this got me to a number where I could calculate qualified dividends in and get the same number she got.

rkhusky
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Joined: Thu Aug 18, 2011 8:09 pm

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by rkhusky » Thu Mar 26, 2020 7:19 am

Joe_R95 wrote:
Thu Mar 26, 2020 7:15 am
rkhusky wrote:
Thu Mar 26, 2020 6:50 am
If this is for the 2019 1040, calculate the tax on the Taxable Income (Line 11b) using the tax tables (pg 62 in the 1040 instructions) or the Tax Computation Worksheet (pg 74). If it matches the tax on Line 12a, then all your income was taxed as income, not qualified dividends or capital gains.
Thank you, this did the trick. I still have no idea where the calculations were made, but this got me to a number where I could calculate qualified dividends in and get the same number she got.
If there were any capital gains or qualified dividends, the tax should have been calculated from the QD and CG worksheet on pg 33, rather than directly from the tax tables.

nalor511
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by nalor511 » Thu Mar 26, 2020 1:00 pm

Joe_R95 wrote:
Thu Mar 26, 2020 7:15 am
rkhusky wrote:
Thu Mar 26, 2020 6:50 am
If this is for the 2019 1040, calculate the tax on the Taxable Income (Line 11b) using the tax tables (pg 62 in the 1040 instructions) or the Tax Computation Worksheet (pg 74). If it matches the tax on Line 12a, then all your income was taxed as income, not qualified dividends or capital gains.
Thank you, this did the trick. I still have no idea where the calculations were made, but this got me to a number where I could calculate qualified dividends in and get the same number she got.
Glad you guys were able to find the answer :happy

Topic Author
Joe_R95
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Joined: Tue Dec 15, 2015 10:45 pm

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by Joe_R95 » Thu Mar 26, 2020 6:11 pm

rkhusky wrote:
Thu Mar 26, 2020 7:19 am
If there were any capital gains or qualified dividends, the tax should have been calculated from the QD and CG worksheet on pg 33, rather than directly from the tax tables.
That was what I kept coming up with from googling. I think that I just wasn't provided with a copy, or it was all done automatically using some software. Thanks for your help.

rkhusky
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Joined: Thu Aug 18, 2011 8:09 pm

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by rkhusky » Thu Mar 26, 2020 6:20 pm

Joe_R95 wrote:
Thu Mar 26, 2020 6:11 pm
rkhusky wrote:
Thu Mar 26, 2020 7:19 am
If there were any capital gains or qualified dividends, the tax should have been calculated from the QD and CG worksheet on pg 33, rather than directly from the tax tables.
That was what I kept coming up with from googling. I think that I just wasn't provided with a copy, or it was all done automatically using some software. Thanks for your help.
Worksheets aren't usually included with the tax return.

kaneohe
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Joined: Mon Sep 22, 2008 12:38 pm

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by kaneohe » Thu Mar 26, 2020 6:27 pm

You can compare the tax your accountant got w/ that obtained by a tax calculator like this https://www.mortgagecalculator.org/calc ... ulator.php to see if they agree.

anon3838
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Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by anon3838 » Thu Mar 26, 2020 6:48 pm

Perhaps I'm missing something here, but looking at my own tax return, Form 1040, Page 1, Section 3a is Qualified Dividends, Section 3b is Ordinary Dividends. These numbers match the tax forms provided by my Broker (Fidelity) on Form 1099-DIV.

Topic Author
Joe_R95
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Joined: Tue Dec 15, 2015 10:45 pm

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by Joe_R95 » Thu Mar 26, 2020 8:23 pm

anon3838 wrote:
Thu Mar 26, 2020 6:48 pm
Perhaps I'm missing something here, but looking at my own tax return, Form 1040, Page 1, Section 3a is Qualified Dividends, Section 3b is Ordinary Dividends. These numbers match the tax forms provided by my Broker (Fidelity) on Form 1099-DIV.
Yes, that's correct. I was afraid mine were done incorrectly(checking because of a bad mishap last year). I was specifically wondering if I was getting taxed appropriately on my qualified dividends because I couldn't figure out where to see the calculation of the lower rate anywhere in the documents I was given. https://www.irs.gov/pub/irs-pdf/i1040gi.pdf page 33 is the worksheet used for that. I really just need to learn to do my own.

kaneohe
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Joined: Mon Sep 22, 2008 12:38 pm

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by kaneohe » Thu Mar 26, 2020 9:09 pm

The stacked bar chart method is an intuitive way to calculate the tax. A simple example: for 2019......
single, age <65, standard deduction 12,200; other income 52,200, DIV/QDIV=20,000; AGI=72,200, taxable income=60,000

The deduction comes out of the ordinary (other) income leaving a bar of ordinary income of 40,000 on the bottom and a bar of 20,000 on top. You consider the bar of 40,000 ordinary income and get the tax from the tax table
of 4664 https://www.irs.gov/pub/irs-pdf/i1040tt.pdf. Then consider the bar of 20,000 QDIV on top.
From the chart here https://fairmark.com/general-taxation/r ... -brackets/ , you can see that QDIV sitting at the level of 39,375 or lower are taxed at 0%. Your QDIV is sitting at the level of 40,000-60,000 so the 20,000 of QDIV is taxed at 15% or 3000. The total tax is 7664.

You can also confirm w/ the calculator linked above......do w/o the QDIV to get tax on ordinary income and then with to get the additional tax on QDIV.

anon3838
Posts: 130
Joined: Fri May 03, 2019 11:54 am

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by anon3838 » Thu Mar 26, 2020 9:23 pm

Joe_R95 wrote:
Thu Mar 26, 2020 8:23 pm
anon3838 wrote:
Thu Mar 26, 2020 6:48 pm
Perhaps I'm missing something here, but looking at my own tax return, Form 1040, Page 1, Section 3a is Qualified Dividends, Section 3b is Ordinary Dividends. These numbers match the tax forms provided by my Broker (Fidelity) on Form 1099-DIV.
Yes, that's correct. I was afraid mine were done incorrectly(checking because of a bad mishap last year). I was specifically wondering if I was getting taxed appropriately on my qualified dividends because I couldn't figure out where to see the calculation of the lower rate anywhere in the documents I was given. https://www.irs.gov/pub/irs-pdf/i1040gi.pdf page 33 is the worksheet used for that. I really just need to learn to do my own.
I’ve been using Turbo Tax for many years and I like it. It is still a bit time consuming because in addition to answering the question prompts, I dig into the parts I don’t understand. There are plenty of little question mark icons that can be rolled over that provides helpful explanations to the specific questions.

I’m glad I’ve taken the time to learn how to do my own taxes, as complex as they are...it has been time well invested.

kaneohe
Posts: 6502
Joined: Mon Sep 22, 2008 12:38 pm

Re: How can I figure out if my accountant reported my qualified dividends correctly?

Post by kaneohe » Fri Mar 27, 2020 10:05 am

rkhusky wrote:
Thu Mar 26, 2020 6:20 pm
Joe_R95 wrote:
Thu Mar 26, 2020 6:11 pm
rkhusky wrote:
Thu Mar 26, 2020 7:19 am
If there were any capital gains or qualified dividends, the tax should have been calculated from the QD and CG worksheet on pg 33, rather than directly from the tax tables.
That was what I kept coming up with from googling. I think that I just wasn't provided with a copy, or it was all done automatically using some software. Thanks for your help.
Worksheets aren't usually included with the tax return.
not w/ the tax return sent to IRS but I would think the wksht would be provided to the taxpayer. I don't about other tax software but Taxslayer provides it.

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