Why this is taxed at 9,000 USD?

[chrisflorescu]

I file my taxes jointly. I'm the only one with a W2.

I did my W2 and I have a credit of 660

After I downloaded my stock activity that consists of:

Long term sales with cost basis reported to IRS of 92,252.77

and 

Short term sales with cost basis reported to IRS of -8393.82

I have a federal tax due of 8840.

From what I've read the Long term capital gains are taxed at 0 for first 80K and 15% thereafter.

Short term there is no gain so I'm not sure how turbotax came up with 9000 taxes. Any help will be appreciated.

Thank you,

Chris

[Texas Roger]

You must add your other taxable income to the capital gains to determine what tax rate will be applied to the long term capital gains. If your other taxable income totals more than $80,800, all your long term capital gains would be taxed at 15%. The long term taxable gains when added to your other taxable income that total less than $80,800, those gains would be taxed at 0%. 

[Texas Roger]

Apparently some portion of your long term capital gains were taxed at 0% and some portion were taxed at 15%. This means your other taxable income was less than $80,800 but high enough that some of your long term capital gains were taxed at 15%. 

[chrisflorescu]

So I have a W-2 taxed at 22% after which I had to receive 600+ USD

I have this 92K Long term and a loss short term of 8.5 k

either way I turn this numbers I can't come up with the number TurboTax claims that I have to pay. It does not make sense

If they add Long Term with w2 what are the brackets? 

By any chance the standard deduction 25 k vanishes because of the 80K? Even so I'm not getting to the number.

[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 Capital Gains Tax Worksheet.  This worksheet will be included as part of your tax return if it is being used to calculate your tax.  If you are using a CD/downloaded version of TurboTax, use Forms mode to look for the Qual Div/Cap Gn form in your return.

You should take a look at the worksheet and plug in your numbers to see how the tax is calculated.  Trying to look at your income one piece at a time will not explain the overall tax shown on your return.  You have to take everything into account at the same time.

You can find the worksheet on page 36 of the PDF document at this link:  2021 Form 1040 Instructions

@chrisflorescu

[Texas Roger]

You can look at form 1040 to verify that you are getting the standard deduction plus $600 if you had charitable contributions totaling at least $600. It is on line 12a & 12b and the sum is on line 12c. 

Ordinary income tax is applied to the amount of ordinary income in excess of the standard deduction. Here are the tax brackets for your ordinary income (W-2 and other ordinary income and short term capital gain or loss):

10% for income up to $19,900

12% for income from $19,901 to $81,050

22% for income from $81,051 to $172,750

If your ordinary income less the standard deduction is less than $80,800, then your long term capital gains that make the total equal to $80,800 are taxed at 0%. Any long term capital gains in excess of that amount are taxed at 15%. You cannot use the capital gains amount on line 7 of form 1040 because that is a sum of your long term gains and your short term losses. That sum is not used for any tax calculation.

You can see how the capital gains tax is calculated on the Qualified Dividends & Capital Gain Tax Worksheet. You will not be able to see that worksheet when using the online product until you have paid for the product.