Author Topic: Taxable Investing---new to taxes and could use some help  (Read 381 times)

icyappraiser

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Taxable Investing---new to taxes and could use some help
« on: February 05, 2019, 11:10:41 AM »
I was doing some reading around but I'm having a little trouble understanding the tax implications of investing in a taxable account (I'm new to this). I'm hoping someone here can help explain to a newbie on this.

I invested $17k into a taxable account this year but did not withdraw any of the money or sell any investments. Dividends were set to automatically re-invest.

I have a 1099 from Vanguard showing:

Total Ordinary Dividends: $454.14
Qualified Dividends: $426.94
Interest Income: $0.00

Do I owe any tax due to this?
If yes, on the $454.14 or the $426.94?
Does this affect my ability to use the 1040EZ form? Otherwise I would be able to use this form (taxable income <$100k, filing single, only ordinary wage income, std deduction)

Philociraptor

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Re: Taxable Investing---new to taxes and could use some help
« Reply #1 on: February 05, 2019, 11:39:21 AM »
I don't know anything about the 1040EZ, but you put qualified dividends on line 3a and ordinary dividends on line 3b, then use the "Qualified Dividends and Capital Gain Tax WorksheetóLine 11a" form to figure your tax.

nburns

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Re: Taxable Investing---new to taxes and could use some help
« Reply #2 on: February 05, 2019, 01:32:14 PM »
Form 1040ez is no longer available for use.  Last year of 1040ez for was filing in the year 2017.  Like Philociraptor said, your report dividends on the 1040 lines 3a and 3b and have to fill out the worksheet to find your taxable income adjusted to include those dividends.

MDM

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Re: Taxable Investing---new to taxes and could use some help
« Reply #3 on: February 05, 2019, 01:33:29 PM »
There is no 1040EZ form this year.  See About Form 1040 | Internal Revenue Service.

Given how simple your return appears to be, it's probably worth your time to do a return by hand (or with the help of a spreadsheet) so it isn't such a black box to you.  Do compare your results with the tax software of your choice, but now is a good time to learn.

Rocketman

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Re: Taxable Investing---new to taxes and could use some help
« Reply #4 on: February 05, 2019, 09:10:12 PM »
The tax rates on those dividends will be:

Qualified Dividends:0% or 15% or 20%
If you are in the 12% bracket it will be zero. If you have high income the 20% in the middle 15%.

The difference between the Ordinary dividends and the Qualified dividends will be taxed at your ordinary income rate. Interest (if you had any) would also be taxed at your ordinary rate.


icyappraiser

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Re: Taxable Investing---new to taxes and could use some help
« Reply #5 on: February 08, 2019, 07:31:12 AM »
Thanks all for the replies. Very helpful...always appreciate this forum!