When paying taxes on LTCG do you pay tax % amounts for each tier level you cross into or does all of the LTCG just fall into one % bracket?
My Situation :
Standard Income - $7,375.
LTCG - 136,333.
Total income - $143,708
Standard Deduction - $24,400
Income After Deduction - $119,308
Standard income falls into the 10% tax bracket.
Combined after standard deduction falls into the 15% LTCG tax bracket.
The LTCG 0% bracket is $0 - 78,750
15% bracket is $78,751 - $488,850
So do I take the 119,308 and pay only 15% on only $40,558 because that’s all that crossed over into the 15% bracket? Or is there not cross over and I ha e to pay the 15% on the whole 119,308? Based on my standard income I figured this would be an easy return to do next April, but maybe I’m wrong.?
