Long Term Capital Gain impact on Federal Tax Due

[Arc21]

This is my first time including long term stock sale in my personal taxes. I am using TURBOTAX DESKTOP HOME AND BUSINESS TAX YEAR 2021 MAC DOWNLOAD WITH STATE. I've read online that long term cap gains are taxed at the lower rate, in my case it should be 15%. However, when I input information about long term stocks sold, my Federal Tax Due number increases by amount which is larger than 15% form the capital gain amount.

Why Federal Increase as % of Capital Gain is greater than 15% and why the percentage goes up when I input more info on the long term stocks sold? See table below to better understand.

	No Stocks	My Stocks	My Stocks + Spouse
Short Term Gain	$0	$0	$413
Long Term Cap Gain	$0	$24,115	$41,998
Federal Amount Due	$6,336	$10,415	$13,891
GA State Amount Due	-$575	$811	$1,863
Federal Increase in $	$0	$4,079	$7,555
Federal Increase as % of Cap Gain	$0	16.91%	17.99%
GA Increase $	$0	$1,386	$2,438
GA Increase as % of Cap Gain	0.00%	5.75%	5.80%

[MinhT1 · Accepted solution]

One possible reason is the incidence of the Net investment income tax of 3.8%. As more capital gains are added, your AGI increases and more capital gains are subject to the NIIT.

Please read this IRS document for more information.

[Mike9241]

LTCG can push other income into a higher bracket. look at the capital gain and qualified dividend worksheet where your tax is computed. this will not include the Net Investment income tax. that's on form 8960. if applicable.

[Arc21]

Net investment income tax seems to be the root cause of why I see the increase. I'll be able to confirm if 8960 form is populated at the end. Thank you for your help.