topic capital gains and income levels not working on 1040 in Get your taxes done using TurboTax

capital gains and income levels not working on 1040

LGJLFTAX — Mon, 23 Feb 2026 11:15:05 GMT

I have tried to find something on this with no luck.

per IRS Some or all net capital gain may be taxed at 0% if your taxable income is less than or equal to $80,800 for married filing jointly which we meet,

PROBLEM

TT is picking up capital gains as taxable on 1040 when taxable income is below threshold. How do I fix that?

Re: capital gains and income levels not working on 1040

rjs — Wed, 04 Jan 2023 00:15:19 GMT

The fact that the long-term capital gains are included in the "taxable income" on Form 1040 does not mean that you are actually paying tax on the gains. (Technically the gains are taxable, but they are taxed at a 0% tax rate.) The tax calculation takes the 0% rate into account. To see how the tax is calculated you have to look at the worksheet where the calculation is done. Depending on what is in your tax return, the tax is probably calculated on the Qualified Dividends and Capital Gain Tax Worksheet, or possibly the Schedule D Tax Worksheet.

Note that the 0% rate applies only to long-term capital gain.

Re: capital gains and income levels not working on 1040

VolvoGirl — Wed, 04 Jan 2023 00:28:34 GMT

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.