I am MFJ, Income was 68394 plus 7579 in LTCG, deductions are 36774. TurboTax says my tax income was 39,199, should my LTCG be taxed at 0% and taxable income be 31620?

Even though the full amount shows up as income on the 1040 as income, if you have capital gains or qualified dividends the tax 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.