I understand that the tax rate for qualified dividends (and capital gains) is 0% if your joint return had taxable income $65,150 or less.
Suppose I have the following (joint return, both H&W over 65):
Pension 40,000 Social Sec 18,000 Dividends 15,000 of which 8000 are qualified dividends.
In 2007 from above, total Income is 73,000 less 18,000 in deductions for a taxable income of $55000. Tax due is based on $55,000 which equates to about $7000. If I have basically the same income for 2008, can I reduce the total income by $8000 (due to qualified dividends not being taxed) to $65000? If so, this should reduce my tax by about $800 (roughly).
Are my assumptions correct?