Could my tax software possibly be correct?!

It's possible if all of your taxable income came from qualified dividends and/or long-term capital gains.

Ira Smilovitz

Probably 80% is those two. So I should go with it or complain to H&RBlock?

As Ira has told you... you can only come up with $968 if 100% of the taxable income is qualified dividends and LT capital gains. If you have

20% ordinary income, the tax can not be $968. The 20% component of ordinary income will be taxed at 10%.

I am struggling with this...

*I have to file a Schedule D. *Lines 18 and 19 (related to collectibles?) are zero, so I don't have to file a Schedule D Tax Worksheet. Is that correct? *I have qualified dividends on 1040 9b and Schedule D lines 15 and 16 are both more than zero, so I have to use the Qualified Dividends and Capital Gain Tax Worksheet. Is that correct? *And my taxes are calculated in that worksheet; is that correct?

If I am right so far, where are the directions for that worksheet, and I will try to work through that.

Thanks.

Try the form 1040 instructions, page 43

Isn't the point of using tax software that it figures this all out for you? Just fill in all the blanks that are relevant to you and it will file the appropriate forms.

And doesn't the software have all the instructions in it? I use TurboTax, and every form includes the IRS instructions for it.

Okay, I went through the worksheet in the 1040 instructions. It is rather different than the worksheet the tax software uses, but gives the same answer.

Apparently deductions and exemptions go against capital gains, interest, and ordinary dividends. All I am left with is $78,000 of qualified dividends, and the first $72,000 of that is tax free. So I am only paying tax on $6,000 of income. Shame NYS doesn't follow the same practice! I am not sure how this makes sense, but I think it is correct.

This it the first year I haven't been killed by AMT. Did they change that?

Although I am not finished with my taxes, I did go to my TurboTax Form

1040. As presented on the screen, there were several different ways taxes could be calculated. One was based upon Schedule D. Going to Schedule D, There was a QuickZoom to a smart tax sheet. There was a very long list of calculations on what todo. I presume the H R Block software has a similar worksheet that shows how it computes tax from all the inputs.

As far as I am concerned, the Government is putting us into involuntary servitude to figure out our taxes. At least before the French Revolution, the tax collector in France compelled you to pay what they thought you should. :=(

The taxing of LTCG and/or qualified dividends could be made easier by using a method from history. I.e., X% of Type A gains/dividends are excludable from income; Y% of Type B gains are excludable, etc.

Can you get that sent into Congressional committee ASAP? :-)