Where do you calculate your long-term Schedule D capital gains? I mean what line in what worksheet? Impossible to find.

[raylopez88]

I know the basics, the theory of different capital gains rates, and in years past I simply use a scratchpad to estimate capital gains taxes (I don't file electronically nor with software, sorry), so my question is much  more basic:  if you look at Schedule D, the back page, the form literally asks you to combine short-term and long-term capital gains.  This is clearly wrong.  So, how (where) is/are the worksheets (Schedule D instructions), when you fill out Schedule D long term capital gains, for you to figure out your capital gains (0%, 15%, 20%)?  I only found a Worksheet in Schedule D instructions for collectibles, and for long-term carryover losses, not for gains.  I have also read this post: https://ttlc.intuit.com/community/taxes/discussion/how-to-calculate-capital-gain-taxes-long-term-and...        and I understand the theory that you should first include taxable income before calculating long-term gains.

Now I see why TurboTax is so popular, but please resist the temptation to just say "use TurboTax software it will automatically figure it out". 🙂  I'd like to know how messed up the Schedule D form is first.

[AnnetteB6]

The worksheet used to calculate your taxes when taking capital gains into account is found in the IRS Instructions for Form 1040.  It is called the Qualified Dividends and Captial Gains Tax Worksheet. 

You can find it on page 33 of the PDF document at this link:  2019 Form 1040 Instructions

[raylopez88]

Hi and thanks AnnetteB6, 

Assume you have long term and short term net capital gains rather than losses.

One further question:  it seems for Yr 2019 on the front page of Form 1040, line 6, you need to use the Sch. D Instructions "Schedule D Tax Worksheet"?  Then you would enter the number found in that worksheet, after of course completing Schedule D, into line 6 of Form 1040?  Then, on the back page of Form 1040, you would figure out your taxes again using the worksheet you reference below (found in the Form 1040 Instructions, namely, "Qualified Dividends and Captial Gains Tax Worksheet")?  

Pls confirm.

One of these days I'll buy TurboTax (TT) as a backup to my mechanical Excel-based calculations, since I understand in TT you can save to your hard drive rather than filing online electronically (correct me if I'm wrong).  The reason I don't like to file electronically is that I've read in several places the IRS will audit you with a full audit more often if you file electronically than with paper.  It sounds intuitively correct, so I'm avoiding that route.  Not that I cheat on my taxes, but who need the hassle of a full audit?

Thanks again.

RL

AnnetteB6 (Employee Tax Expert) posted a new reply in Investors & landlords on March 2, 2020 5:15 AM :

Re: Where do you calculate your long-term Schedule D capital gains? I mean what line in what work...
The worksheet used to calculate your taxes when taking capital gains into account is found in the IRS Instructions for Form 1040. It is called the Qualified Dividends and Captial Gains Tax Worksheet.

You can find it on page 33 of the PDF document at this link: 2019 Form 1040 Instructions

[raylopez88]

Hi and thanks AnnetteB6, 

Assume you have long term and short term net capital gains rather than losses.

One further question:  it seems for Yr 2019 on the front page of Form 1040, line 6, you need to use the Sch. D Instructions "Schedule D Tax Worksheet"?  Then you would enter the number found in that worksheet, after of course completing Schedule D, into line 6 of Form 1040?  Then, on the back page of Form 1040, you would figure out your taxes again using the worksheet you reference below (found in the Form 1040 Instructions, namely, "Qualified Dividends and Captial Gains Tax Worksheet")?  

Pls confirm.

One of these days I'll buy TurboTax (TT) as a backup to my mechanical Excel-based calculations, since I understand in TT you can save to your hard drive rather than filing online electronically (correct me if I'm wrong).  The reason I don't like to file electronically is that I've read in several places the IRS will audit you with a full audit more often if you file electronically than with paper.  It sounds intuitively correct, so I'm avoiding that route.  Not that I cheat on my taxes, but who need the hassle of a full audit?

Thanks again.

RL

AnnetteB6 (Employee Tax Expert) posted a new reply in Investors & landlords on March 2, 2020 5:15 AM :

Re: Where do you calculate your long-term Schedule D capital gains? I mean what line in what work...
The worksheet used to calculate your taxes when taking capital gains into account is found in the IRS Instructions for Form 1040. It is called the Qualified Dividends and Captial Gains Tax Worksheet.

You can find it on page 33 of the PDF document at this link: 2019 Form 1040 Instructions