If my AGI is 67k, and I am filing MFJ, why were my long term capital gains included in my tax liability?

[ThomasM125]

Based on your income, the long term capital gains should not have been taxed. I suggest you look the schedule D tax worksheet to verify that the gains are being taxed. The amount on line 22 of that form would be the income taxed at 0%.

It could be that you have a tax but it is not coming from your investment gains.

@jkvguharden

[Edited 3-15-22 @4:16 PM EST]

[jkgvharden]

Line 22 on Schedule D looks like this: 
22 Do you have qualified dividends on Form 1040, 1040-SR, or 1040-NR, line 3a?
Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions
for Forms 1040 and 1040-SR, line 16.
No. Complete the rest of Form 1040, 1040-SR, or 1040-NR
and line 7 of my 1040 has $592.00

[Mike9241]

capital gains push other income into a higher bracket. 

[cali k8]

My Long Term Capital gains are not taxable due to my taxable income is under 80,800.
And YET- Turbo tax placed that amount on line 7 of my 1040 thereby including that amount in my taxable income. I believe this is an error an the part of TurboTax. To whom would I speak regarding getting this corrected?

[MinhT1]

As @Mike9241 stated above, long term capital gains are added to your other taxable income to determine your tax bracket.

Long term capital gains are taxed at 0% if your tax bracket is 12% or less (less than $81,050 of taxable income for MFJ)..

However, long term capital gains are included in your taxable income, and that part of long term gain which crosses over $81,050 is taxed at 15%.

[jkgvharden]

I don't know if I am misunderstand you, or if you are misunderstanding me. I'll try to be more clear, attach a screenshot
My total income, including change I found in the street, (kidding), is 67,322. (line 11)
That's from w2's, interest, dividends, unemployment, social security, ira withdrawals AND LONG TERM CAPITAL GAINS. (line 7)
From that amount TurboTax deducted the standard deduction of 25,100. Line 15 of my 1040 shows taxable income of 42,222
That figure includes my $592 in long term capital gains from line 7.

so-it looks to me like my LT CG was included in the calculation of how much income tax I am liable for. Is there someplace else it is listed as a deduction from my taxable income?

[JulieS]

No, it is not subtracted from your income. Rather the total tax is calculated on the Qualified Dividends and Capital Gain Tax Worksheet. 

On that worksheet the tax is calculated separately for the capital gains and the ordinary income and then added together. See the image below.

[jkgvharden]

Thanks for this! I do not see the standard deduction on this form that you shared. And I do not see that form in my return. I am truly appreciative of you efforts to help me understand.

[jkgvharden]

Oh, wait! I get it now. Line 1 on this form should have been the amount from line 15, not line 11. 
You're awesome! thanks again

[kimbert]

To get clarification to answer my question - I need to plan for all of my income, including long term capital gains to be below the 12% tax rate limit, for my LTCG to be 0 tax.  Otherwise, they will be taxed at 15% for the portion over the tax tier limit - am i understanding correctly?  

Thanks,

Kim

[MarilynG1]

Click this link for more info on Capital Gains Tax.

@kimbert