Taking SS Early - Tax Related Question

[cute fuzzy bunny]

Wacky, so they report non-ordinary, qualified dividends separately on the 1099, then roll them into a box that says "ordinary dividends" on the 1040 when they're not ordinary.

I'm pleased as punch that I dont do all the tax calcs on paper and by hand, because my head would have exploded when I got to that part...if it hadnt already.

 

[Peter]

Wacky

Yes indeed. Here's a further reference from Fairmark:

http://www.fairmark.com/mutual/ordinary.htm

Peter

 

[FIRE'd@51]

Wacky, so they report non-ordinary, qualified dividends separately on the 1099, then roll them into a box that says "ordinary dividends" on the 1040 when they're not ordinary.

Not to defend the IRS, but the 1099 (and Form 1040) only say "Ordinary Dividends" with a sub-category of "Qualified Dividends". There is actually no such category as "non-ordinary" dividends.

 

[Martha]

Not to defend the IRS, but the 1099 (and Form 1040) only say "Ordinary Dividends" with a sub-category of "Qualified Dividends". There is actually no such category as "non-ordinary" dividends.

Dividends are distributions from a corporation to its shareholders. Though the term "non-ordinary" is not used, dividends can be non-taxable return of capital. If taxable, they can be capital gain distributions or ordinary dividends. If ordinary dividends they can be qualified or not qualfied. FWIW

 

[SecondCor521]

I think the term ordinary is to distinguish them from stock dividends, which are relatively rare these days anyway.

2Cor521

 

[FIRE'd@51]

I think the term ordinary is to distinguish them from stock dividends, which are relatively rare these days anyway.

2Cor521

I believe this is correct. Not so rare though, because a stock split is considered a stock dividend. Of course, a stock split is a non-taxable event so it would not be reported as an ordinary dividend.

 

[cute fuzzy bunny]

Maybe to help distinguish them they could call them "happily taxed dividends" and "we aint giving you the
reach-around taxed dividends"