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morfus64
New Member

I received a 1099-B from the exchange of a mutual fund. Turbo Tax deluxe configured it and showed no fed tax increase but only state of Ca. increase what gives?

 
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Accepted Solutions
TomK
Expert Alumni

I received a 1099-B from the exchange of a mutual fund. Turbo Tax deluxe configured it and showed no fed tax increase but only state of Ca. increase what gives?

It is very possible that you have not had any tax on your federal tax return. The reason is: not all capital gains are treated equally and the tax rate varies between short-term and long-term gains.
Since your gains are long term (since it is mutual fund), you really benefit from a reduced tax rate on your profits. For 2016, the long-term capital gains tax rates are 0, 15, and 20 percent . If your ordinary tax rate is already less than 15 percent, you may pay zero percent long-term capital gains rate- which means you will not see a difference on your refund/ tax bill.


When you are done with your tax preparation, you may want to look at your form 1040 (and you can do so before you pay for the program) - page 2 of the form displays Tax Smart Worksheet (right under line 43).  You will see the amount of tax and where tax is from. If item 4, Qualified Dividends and Capital Gain Tax worksheet is checked, you are paying "favorable" tax and, based on your tax bracket, you may not see increase in your tax bill or decrease in your refund.
 

To preview your 1040 form before filing, follow these steps:

  1. Sign in (continue) your online return, if you're not already signed in.
  2. Select My Account near the top of your screen, and then Tools from the drop-down menu.
  3. Under Other helpful links... click View Tax Summary.
  4. Select Preview my 1040 near the top of your screen.
  5. Click Back near the top of your screen to exit the preview screen.

To preview all forms, schedules, and worksheets in your return before filing:

  1. From the My Account drop-down at the top, select Print Center.
  2. In the pop-up, click the first option (Print, save, or preview this year's return). If you haven't paid or registered yet, you'll be prompted to do so before you can view your full return.



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1 Reply
TomK
Expert Alumni

I received a 1099-B from the exchange of a mutual fund. Turbo Tax deluxe configured it and showed no fed tax increase but only state of Ca. increase what gives?

It is very possible that you have not had any tax on your federal tax return. The reason is: not all capital gains are treated equally and the tax rate varies between short-term and long-term gains.
Since your gains are long term (since it is mutual fund), you really benefit from a reduced tax rate on your profits. For 2016, the long-term capital gains tax rates are 0, 15, and 20 percent . If your ordinary tax rate is already less than 15 percent, you may pay zero percent long-term capital gains rate- which means you will not see a difference on your refund/ tax bill.


When you are done with your tax preparation, you may want to look at your form 1040 (and you can do so before you pay for the program) - page 2 of the form displays Tax Smart Worksheet (right under line 43).  You will see the amount of tax and where tax is from. If item 4, Qualified Dividends and Capital Gain Tax worksheet is checked, you are paying "favorable" tax and, based on your tax bracket, you may not see increase in your tax bill or decrease in your refund.
 

To preview your 1040 form before filing, follow these steps:

  1. Sign in (continue) your online return, if you're not already signed in.
  2. Select My Account near the top of your screen, and then Tools from the drop-down menu.
  3. Under Other helpful links... click View Tax Summary.
  4. Select Preview my 1040 near the top of your screen.
  5. Click Back near the top of your screen to exit the preview screen.

To preview all forms, schedules, and worksheets in your return before filing:

  1. From the My Account drop-down at the top, select Print Center.
  2. In the pop-up, click the first option (Print, save, or preview this year's return). If you haven't paid or registered yet, you'll be prompted to do so before you can view your full return.



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