topic TurboTax incorrectly calculates tax for short-term capital gains in Get your taxes done using TurboTax

TurboTax incorrectly calculates tax for short-term capital gains

brb3 — Sun, 08 Feb 2026 22:29:52 GMT

How can I force TurboTax to apply the standard deduction to short-term capital gains?

For example: If I enter $10,000 for income for my son and then add $1000 in short-term capital gains (1099-B), it calculates that $100 in tax is owed (10% of short-term) even though the total income + short-term is less than the standard deduction of $15,750 for a single filer. Is there a way to trick TurboTax into correctly applying the standard deduction to the short-term gain?

Thanks!

Re: TurboTax incorrectly calculates tax for short-term capital gains

DavidD66 — Mon, 09 Feb 2026 00:53:01 GMT

If your son is being claimed as a dependent . the standard deduction for 2025 is limited to the greater of $1,350 or the sum of $450 plus the dependent's earned income. The total deduction cannot exceed the basic standard deduction for a single filer ($15,750 for 2025). If your son can be claimed as dependent on your (or someone else's return) then using your example and assuming the $10,000 is earned income, his deduction would be $10,000 plus $450 = $10,450. He would have $550 of taxable income from short-term capital gains.

Re: TurboTax incorrectly calculates tax for short-term capital gains

brb3 — Mon, 09 Feb 2026 00:26:37 GMT

Thank you for the explanation! That was the issue as the value you indicated had replaced the standard deduction. I now realize that my son no longer fits the criteria as a dependent, so the fix is an easy one!