is capital gains included in the taxable income limit of $96700 per married couple? Do we get to take off our standard deduction? IE How do they count our income regarding this taxed limit? Which line of the 1040 is the determining amount ?

[DoninGA]

Capital gains is reported as ordinary income on your Form 1040 Line 7

[VolvoGirl · Accepted solution]

The Standard Deduction is on 1040 line 12 and reduces all your your income including Capital Gains.

For Capital Gains.......Even though the full amount shows up in the total income on the 1040 line 7, 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 the worksheets to see it.

For 2024 the standard deduction amounts are:

Single 14,600 + 1,950 for 65 and over or blind (16,550)

HOH 21,900 + 1,950 for 65 and over or blind (23,850)

Joint 29,200 + 1,550 for each 65 and over or blind (30,750/32,300)

Married filing Separate 14,600 + 1,550 for 65 and over or blind (16,150)

[rjs]

What is the $96,700 "income limit" that you are referring to? Do you mean the top of the 0% bracket for qualified dividends and long-term capital gains? It is $96,700 for 2025. For 2024 it's $94,050.

The brackets apply to your total taxable income, including short-term and long-term capital gains. Taxable income is your total income minus adjustments and either the standard deduction or itemized deductions. Taxable income is on Form 1040 line 15.