I have an unforeseen short term capital gain for 2024 of $70,000. amending my tax filing. I see the tax rate is 37%. TT is calculating my tax rate at over 50%.

[rjs]

What do you mean by TurboTax "calculating my tax rate at over 50%"? Is that the overall rate applied to all of your income, or the rate that it is applying to the added short-term capital gain? Where exactly do you see a 50% tax rate? Be specific - form numbers, line numbers, and exact amounts.

Depending on your other income, you might be subject to Net Investment Income Tax (NIIT), which increases the total tax rate on investment income (though not to 50%). Is there an amount on Schedule 2 line 12? That is NIIT.

You cannot just compare the total amount of tax before and after you add the short-term capital gain. Adding income to a tax return can have side effects besides the direct tax on the added income. The increase in income could reduce or eliminate various deductions or credits that are not related to the income that was added, but that have income-based limits or phase-outs. If you received Social Security benefits it could make more of your Social Security taxable. You have to compare your entire Form 1040 (not 1040-X) line by line before and after adding the short-term capital gain to see what else is changing besides the amount of capital gain. If there's a change in an amount that comes from another form or schedule, you have to look at that form or schedule to see what's happening.

[VolvoGirl]

Did you wait to amend until you got the first original refund (or paid the tax due)?   When you amend you may have to pay back some of the first refund.  How are you calculating the tax?  

Go by the actual 1040X.  Line 18 should be your original refund amount and line 22 should be your additional refund.  If you paid on your original return it will be on line 16.  If there is an amount owed with the amendment, it will be on line 20.

When you enter one taxable transaction, you can't just watch the monitor.  You increased your overall adjusted gross income and with that come many other changes in your return, not just the incremental tax on the one transaction.

Like for example it increased your AGI and that would decrease some deductions if you itemized on Schedule A.  And by increasing your AGI it might reduce some credits you were getting like EIC.  And can make more of any Social Security taxable.