1099-div, total capital gain distributions, top tax bracket?

Question

so I have a dreyfus disciplined stock fund that I regularly buy into through a payroll deduction.   I have never sold a single share.  This year I see on my 1099 some real gains, 
specifically:
box 1a total ordinary dividends $485.16
box 1b Qualified dividends        $485.16

and the big one:
box 2a Total capital gain distributions:   $10,016

sound great, but now I need to report these as incomes.

Now I'm confused,  box 1a and box 1b are the same amount, and the instructions say that the 1b is available for reduced tax rate, (vs the 1a that goes on schedule b and as such will be at my top tax rate)  How can I reduce my tax burden?

now the biggie, 
that 10,016 total capital gain distributions.   following the instructions, it goes. on schedule D, line 13, then sch D, 16, which in turn was the exact dollar amount that ended up on my 1040, line 13.

Is there something (maybe in the worksheet, I havent looked at yet,) to get these values off of my AGI so I will pay less than the 28% rate?

additional info:   married filing jointly, 4 dependents, AGI about $180k,

TIA,

StephenWeinstein · Accepted Answer

First, to pay less than the 28% rate, you need to leave it on the AGI, and subtract it only on the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 44 (or in the instructions for Form 1040NR, line 42).

Second, box 1a will not be at the top rate.  Box 1a is the total (sum) of what will be at the top rate plus what will be at the lower rate.  To find the amount at the top rate is you subtract Box 1b from Box 1a.  Since they are equal, $0.00 will be at the top rate.

kelby7670 · Answer

Box 1b simply gives the portion of box 1a that are qualified. In your case, it is all of it.
This topic is a little tricky. You don't get the capital gains favorable tax treatment until your taxes are computed. At that point a Schedule D worksheet is used instead of the regular tax computation.

? · Answer

Yes, both the qualified dividends and capital gain distributions qualify for the lower tax rate.  The exact rate depends on your total income which includes both of these.

1099-div, total capital gain distributions, top tax bracket?

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