Qualified Dividends and Capital Gain Tax Worksheet

Last year my daughter earned approx. $1,300 in wages and about $4,000 in investment income. She had a payment due of approx $500. A couple of months later I received a refund from the gov't for about $300 with an explanation the amount in Line 28 of my 1040a was incorrect and that I should have used the Qualified Div and Capital Gain Tax Worksheet which generally applies a lower rate. Turbo Tax appears to be calculating her taxes the same incorrect way this year. What can I do to ensure the lower tax rate is applied as Turbo Tax doesn't appear to be doing it for me. Any help that could be provided would be appreciated.

(Asked 04/12/09, Views 11)

I assume you're doing a separate return for her and not trying to put her income on your return. Her investment income is reported on 1099's (1099-div, 1099-int, 1099-B). Be sure to enter exactly as shown. If qualified dividends are entered in box 1b, TT will calculate it properly, using the Qualified Div and Capital Gain Tax Worksheet. To be sure that happened, when done, go to forms and you should see said worksheet

(Posted 04/12/09)