TurboTax says I have $109k towards capital gains tax but it swings my tax responsibility by $20k but that is more than 15%. Is TurboTax miscalculating my long term gains?

[dlupisella]

Based on the 2021 long-term capital gains tax brackets, I should only have a tax responsibility of about $16.5k but when I add the stock information it goes from a $2k refund to a $18.5k payment.  Something seems off on the calculations.

[ColeenD3]

Are you sure they are all long-term? Print your Form 8949 and your Qualified Dividends and Capital Gain Tax Worksheet to check all the figures and see where the tax is coming from.

CGWS

[dlupisella]

It is showing all "Net gain or loss" in the Total Long-term section with none of it being reported in the Total Short-term section.  Total Long-term is equal to approximately $119k but I had some losses from last year that carried and sold some crypto which was long term hold as well; thus the $109k in adjusted Long-term gains.

[MinhT1 · Accepted solution]

@dllupisella

The net long term capital gains will be added to your modified adjusted gross income (MAGI). And if your MAGI is above $200,000 ($250,000 if married filing jointly), your capital gains are subject to the Net Investment Income Tax (NIIT) of 3.8%. This would add about $4k to your tax liability.

Please read this IRS document for more information.

[dlupisella]

Thank you @MinhT1!  I saw the NIIT last night when doing some research but could not find adequate documentation to explain it so this was helpful.  This is that additional tax liability (finally found the word I wanted to use earlier) I could not seem to figure out.