AnnetteB6
Employee Tax Expert

Get your taxes done using TurboTax

The tax calculators, tax bracket calculations, and tax tables all calculate income tax based on ordinary income.  They do not take into account items such as qualified dividends or capital gains that are taxed at a lower rate than ordinary income.  If a portion of the total taxable income was due to qualified dividends or capital gains, then the overall tax will be less.  How much less will depend on how much of the income is being taxed at a lower rate.

 

The worksheet used to calculate your taxes when taking capital gains into account is found in the IRS Instructions for Form 1040.  It is called the Qualified Dividends and Capital Gains Tax Worksheet.  This worksheet will be included as part of your tax return if it is being used to calculate your tax.  

 

You can also find it on page 36 of the PDF document at this link:  2021 Form 1040 Instructions

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