Married couple filing jointly had AGI of less than 496600. 23.8% (20+3.8) long term capital gain tax was calculated, but I think it should be only 18.8% (15+3.8) because AGI is under $469600.
Is there something wrong with the way TT calculates?
How can I correct it?
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Because you say "appears" too high, I suspect you're just misinterpreting the bottom line. The capital gains tax is calculated on The Qualified Dividends and Capital gains worksheet (for some people it will be the Schedule D worksheet). Review the worksheet for the calcs to see if you are really being taxed at 20% instead of 15%.
The net investment income tax (the 3.8%) is calculated separately on form 8960.
did you have any ordinary income because that would get taxed at higher than 15%? check the capital gain calculation worksheet
My understanding was that as long as the AGI is less than $496600, the capital gain is taxed at 15%. if above, 20%.
Because you say "appears" too high, I suspect you're just misinterpreting the bottom line. The capital gains tax is calculated on The Qualified Dividends and Capital gains worksheet (for some people it will be the Schedule D worksheet). Review the worksheet for the calcs to see if you are really being taxed at 20% instead of 15%.
The net investment income tax (the 3.8%) is calculated separately on form 8960.
Thank you for your answer.
Let's just add some hypothetical numbers:
Taxable ordinary income $425K, capital gain $25K. On the Qualified Dividends and Capital Gain Tax Worksheet the capital gain is calculated correctly with 15%. But if I add this $25K capital gain income in TT, the owed tax amount increased by 23.8%. What am I missing?
You may be losing some credits (such as the Child Tax Credit) due to the increase in income.
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