Why, in TurboTax, are my long-term capital gains being reported as normal taxable income?

Forum|Forum|5 years ago
May 26, 2020
3 replies
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I have a long-term gain of $2,220. In the forms, this is added as standard taxable income. From IRS information, the tax on long-term capital gains for me should be 0%. Why is TurboTax figuring this wrong?

TurboTax Premier Online

Best answer by MinhT1

In TurboTax, your long term capital gain is included in your taxable income to conform to the IRS rules and tax forms. However, tax on your long term capital gain is correctly calculated at the reduced rate.

MinhT1Answer

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Anonymous

there will be a form to compute the taxes on LTCG and qualified dividends. it will be labeled something like "Qualified Dividends and Capital Gains Worksheet"

JoeGraz

Tax Question

I am using Turbo Tax (TT) and my income is about $32K. I have some long-term capital gains which I should not pay tax on since I mak?e less than $42K. But TT is taxing me on them anyway. Am I not interrupting the tax laws correctly. TT is saying they are Long Term Capital Gains.

Or is there a box I need to check

whlifeAuthor

So, I did my taxes on TurboTax online. When I entered the information on capital gains, I expect TurboTax to complete the taxes correctly. It did no calculations, only entered the gains.

What I see, if I want it entered correctly on my tax forms, I have to do it myself and not use TurboTax. Is that what we are saying?

DoninGA

Employee

@whlife wrote:

So, I did my taxes on TurboTax online. When I entered the information on capital gains, I expect TurboTax to complete the taxes correctly. It did no calculations, only entered the gains.

What I see, if I want it entered correctly on my tax forms, I have to do it myself and not use TurboTax. Is that what we are saying?

What do you mean "did no calculation"? Did you have taxable income reported on your federal tax return Form 1040 on Line 11b? If so, what were the Taxes entered on Line 12a?

VolvoGirl

Employee

Even though it shows up as income on the first page, if you have capital gains or qualified dividends the tax on line 12a is not taken from the tax table but is calculated separately from schedule D. The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet. It does not get filed with your return. In the online version you need to save your return as a pdf file and include all worksheets to see it.

For the Desktop version you can switch to Forms Mode and open the worksheet to see it. Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.

ESBinMD

When using TurboTax, how do I ensure that my capital gains are taxed at 0% if I do cross the relevant threshold?

Hal_Al

Employee

Q. When using TurboTax, how do I ensure that my capital gains are taxed at 0% if I do cross the relevant threshold?

A. Review the "Qualified Dividends and Capital Gains Tax worksheet" (abbreviated "Qual Div/Cap Gn" on the forms list) for the actual calculations. Look at line 9 (the amount taxed at 0%) and line18 (the amount taxed at 15%), in particular.