Paying Taxes

[Francisco2019]

Hi,

if i make a gain from selling stocks the only tax I need to pay is the long and short capital gain bracket? Because my income taxes from my job is federal, state, Medicare, social security, etc. so if I gain from a stock selling all I need to pay is the capital gain? Also if I loose profit how does it work will I get more tax return or ??? 

[NCperson]

stock sold at a gain is only subject to federal and state taxes; no obligation to pay social security or medicare tax on that gain

if you have a loss, those losses can be offset against any gains.  if you have more losses than gains, you can deduct up to $3000 of those losses as ordinary income in a year and then defer any additional losses to the following year where you can again use the remaining losses to offset any gains and then deduct up to $3000 of any further remaining losses against ordinary income.  That continues into the future until all the losses are used up. 

TT will handle this with no problem 

[Francisco2019]

So I have to pay capital gain + state and federal taxes or I only need to pay capital gain (which includes everything)

[VolvoGirl]

The tax on your capital gains will be calculated in with your regular income tax.  Your total tax will be figured on schedule D.

[Francisco2019]

Still don’t understand explain please?

[Hal_Al]

Q. If I make a gain from selling stocks the only tax I need to pay the long term capital gain rate? 

A. Yes, assuming you owned the stock for more than 1 year.  But the LTCG rate varies depending on your other income. Some  LTCG may be tax at 0% and some at either 15%, 20% or 23.8%.

You do not pay social security and medicare tax on capital gains, long or short; only income tax, and only at the special rate (if long term).

If you owned it less than 1 year, a short term capital gain (LTCG) is taxed as ordinary income (no special rate).  Capital losses (either short or long term) are first used to reduce any other capital gains. Any excess loss can be deducted against ordinary income, but not more than $3000. Any excess is carried forward to next year.

Try this tool https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1. Enter your regular income first to see the regular tax. Then add the sale to see the effect.
Enter the difference between the sale price and what you paid for it originally as a long term capital gain (LTCG).

State income tax is separate and in addition to the federal tax.  Although some states do have a special capital gains rate, most tax gains (long or short) as ordinary income

[Francisco2019]

So the Long Term Capital Gain and Short Term Capital Gain brackets is only the tax you have to pay federal tax and there another tax to pay the state? Basically long and short to capital gain tax don’t include all the tax you have to pay. Once you pay the capital gain tax there also other taxes you have to pay right?

[Hal_Al]

No, not other taxes (plural). There's just federal and state income tax.

The federal income tax is applied at  special (lower) rates for long term capital gains (and "qualified" dividends).

TurboTax (TT) uses the IRS required "Qualified Dividends and Capital gains worksheet" to calculate the tax.  It can be complicated https://apps.irs.gov/app/vita/content/globalmedia/capital_gain_tax_worksheet_1040i.pdf

[Francisco2019]

What I basically meant is that the federal and state tax is already in the capital gain 

[Hal_Al]

Q. What I basically meant is that the federal and state tax is already in the capital gain?

A. No. State and federal income tax are always separate; regardless of what type of income is being taxed. There is no exception for capital gains.

It's somewhat of a misnomer to refer to a capital gains tax.  There is no "capital gains tax", per se.  There is only an income tax.  Capital gains are added to your other income and your income tax is calculated.  It just that the tax calculation is complicated because capital gains (long term) is taxed at a different rate.

If you are subject to a local (city) income tax (see https://ttlc.intuit.com/community/after-you-file/discussion/local-income-taxes/00/689628), capital gains are usually not taxed.