# What do the components of the taxable income in the Schedule D Tax Worksheet mean?

The Schedule D tax worksheet calculates the tax on the taxable income by

• first decomposing the taxable income in line 1 into lines 19, 20, 28, 31, 37 and 40,
• then taxing on them at different tax rates of regular tax rate, 0, 0.15, 0.20, 0.25, and 0.28. The resulted taxes are in lines 42, 21, 29, 32, 38 and 41.
• finally summing their taxes into line 43

I wonder what the amounts in lines 19, 20, 28, 31, 37 and 40 mean?

Without understanding what they represent, it is hard to understand the rationale underlying the worksheet. My purpose is to

• understand which part of the taxable income is taxed at which tax rate, and
• sort the different parts of the taxable income according to their tax rates, and
• find out which parts have relative high tax rates, and which have low tax rates.

Thanks.

p.s.

Do you agree that the worksheet was written like a computer program with little readability, e.g. no suggestive names for most lines?

What are some ways for us to understand the worksheet?

• In the US there isn't a single tax rate for all income. Long-term investment, for example, is taxed at its own rate. If you have income in these categories, you need to break them out and compute their tax separately. The instructions tell you what amounts need to go into each category to get the right result. Since this generally reduces your taxes, don't complain too loudly about the additional work. Commented Jan 12, 2017 at 0:30
• You misunderstood my question. My question was what the components of the taxable income represent. I am trying hard to understand the worksheet, but not complaining about it.
– Tim
Commented Jan 12, 2017 at 0:37
• @Tim: I'm not sure I understand what you're saying. The components of the taxable income represent the components of your taxable income that are taxed at each rate. What other information are you looking for? Commented Jan 13, 2017 at 5:00
• @BrenBarn For example, which component is ordinary dividends, qualified dividends, long term capital gain, short term capital gain? money.stackexchange.com/questions/74714/…
– Tim
Commented Jan 13, 2017 at 5:05
• @Tim: See my comment on your other question. You cannot in general assume that every piece of income that is taxed at a given rate is the same "kind" of income, nor that all income of the same "kind" will be taxed at the same rate. Different kinds of income may be lumped or split for certain purposes. Commented Jan 13, 2017 at 5:18