Long term capital gain taxed is not 15%

[Danielqk]

TurboTax premier is wrong calculation.

My long term capital gain total is added to my income as ordinary income?

It should be taxed  only 15% or 20% Max 

Why total long term capital gain was added to income and boosted up the federal tax.

[VolvoGirl · Accepted solution]

Even though it shows up as income on the first page,if you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from schedule D.  The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet.  It does not get filed with your return.

In the online version you need to save your return as a pdf file and include all worksheets to see it.

For the Desktop version you can switch to Forms Mode and open the worksheet to see it.  Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.  And you will need to use this IRS worksheet on page 15.

https://www.irs.gov/pub/irs-pdf/i1040tt.pdf

[DianeW777 · Accepted solution]

The information from VolvoGirl is correct. If you are using TurboTax Online and would like to print your return to review the tax calculations follow the instructions below. Capital gains will be added to your taxable income, however the tax calculation takes place on a worksheet.

You have access to all forms when you choose to print your return in TurboTax Online/Mobile.  However you are required to pay before printing, but do not have to file until you are ready.

• Can I print a copy of my return in TurboTax Online before filing?

If you are using TurboTax Desktop you can switch to Forms and review all forms and worksheets.

@Danielqk 

[Danielqk]

Thanks for responding but I need more detail procedures

If I save as pdf how can I change or input the PDF file ?

Pdf file is fixed and can not be changed ?

Why TurboTax do the right calculation at first step ?

[VolvoGirl · Accepted solution]

If you need to change something you need to go back into your Online return.  Click on Add a State to let you back into your return. The pdf is just to look at your return.  Turbo Tax is doing it right.   What do you want to change?

[AnnetteB6 · Accepted solution]

You cannot change or update the PDF that you print.  You cannot change the tax calculation that was done by TurboTax, which is correct.  

When you have long-term capital gains, the total is added to your income on Form 1040 line 7.  However, just because it is added to your income, that does not mean that it is being taxed as ordinary income.  

There is a separate worksheet called the Qualified Dividends and Capital Gains Tax Worksheet.  Without going into great detail, this worksheet separates your capital gains from the rest of your income and applies the capital gains rate to the the capital gains income (which is lower than the ordinary income tax rate).  

If you look at this worksheet, pay attention to lines 23 and 24.  The tax calculated on line 23 takes into account the capital gains tax.  The tax calculated on line 24 comes directly from the tax tables.  Then, the lesser of those two lines is reported on line 25 and Form 1040 line 16.  Therefore, if the capital gains tax rate gives you a lower overall tax, then that is the tax on your Form 1040.

@Danielqk