capital gains limits

[kaleu]

I am 87 widow and looking at 2020 taxes. This is my question . Since  IRA withdraws have been waived for the year my income from div and interest will be 7,800.00plus SS 17,568 .That is my total income .I have sold stocks and have a capital gain of 11,915. How much more capital gain can I have before I will have to pay  taxes. It is now zero capital gain ? thank you  gary baker 

[Texas Roger]

According to my calculations, you could have an additional $7300 of long term capital gains or a total of $19215 long term capital gains before owing any tax. This assumes all your interest and dividends are taxable at ordinary income tax rates.  I assumed you are filing Single and use the standard deduction.

This is based on 2019 tax rates and standard deduction but 2020 tax rates aren't expected to be much different.  I'd suggest you get other opinions before relying on this because it is always possible that I could have made a mistake in the trial tax return I prepared for your situation.

If you use the CD/download product to prepare you tax return, there is a very handy tool you can use to estimate taxes for next year. Switch to Forms mode and type what-if in the open form box and click on what-if worksheet to bring up a worksheet where you can enter estimated 2020 information.

In either the online or CD/download product, you can use the tool within your 2019 tax return to calculate estimated taxes for next year. To find it type estimated taxes for next year in the search box and click on jump to estimated taxes for next year.  Say No to changing the W-4 and continue on. 

[kaleu]

thank you for the response ,like to go another step. Know at some point would have to pay tax paying tax on 50% of SS  since have to report all incomes on the worksheet. It is my understanding cap gain cannot put one into higher tax bracket.. With that in mind   where is the limit  or number of cap gain would have to start paying 10% cap gain .I think if my adjusted income  stays under 40,000 no tax on capital gain.In other words if I sold 100,000 cap gained stocks and my adjusted gross income is under 40,000 my tax on cap gain would be zero.  Thanks again for response . 

[Texas Roger]

When your total taxable income (Adjusted Gross Income less the standard deduction) is less than $78,450, the part of the taxable income that is from long term capital gains is taxed at 0%. When your total taxable income is from $78,450 up to $434,550, the capital gains amounts in that taxable income range are taxed at 15%. The tax rate is based on taxable income and not Adjusted Gross Income.

You should also be aware that as your taxable income increases, the amount of your Social Security taxable Income increases to up to 85% of the total Social Security income not just 50%. Capital gains amounts have no affect on your ordinary income tax brackets other than the fact that the increase in the amount of Social Security that is taxable as a result of more capital gains can move you into higher ordinary income tax brackets. 

Try using one of the tools in TurboTax that I suggested to help you determine your taxes with various alternatives. 

[kaleu]

thank you very much ,have a safe day ..