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Qualified Dividends and Capital Gain Tax Worksheet—Line 44 in the instructions of Form 1040 calculates the tax on the taxable income by

  • first decomposing the taxable income in line 1 into lines 7, 11, 19, and 22,
  • then taxing on them at different tax rates of regular tax rate, 0, 0.15, and 0.20. The resulted taxes are in lines 20, 23 and 24.
  • finally summing their taxes into line 25

I wonder what the amounts in lines 7,11, 19, and 22 mean?

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?

  • Yes, the worksheet plus it's instructions can be thought of as a program, though a spreadsheet would be a closer analogy and in fact Zbefore commercial tax software some of us used to translate the forms into spreadsheets for our own convenience. – keshlam Jan 12 '17 at 5:19
  • Can you show me the spreadsheets converted from the two worksheets? – Tim Jan 12 '17 at 5:24
  • Haven't done that exercise in a decade or two. Easier to buy a commercial package which has already implemented that. – keshlam Jan 12 '17 at 5:29
  • What do you mean by spreadsheets? How are they more convenient for you to understand the worksheets? – Tim Jan 12 '17 at 5:31
  • @Derek_6424246 can you kindly educate me how the two posts of understanding these two worksheets are duplicates? Can I suppose you understand the two worksheets very well to the point that you are able to answer the two posts? – Tim Jan 12 '17 at 17:36