Is TT calculating the tax properly?

[wswofford]

I'm used to TT calculating taxes owed as you go along, and then the refund as you enter deductions (assuming that you have enough deductions).  This year it never showed any taxes owed.  I ended up with a taxable income of $54,091 with $0 taxes so that I got a refund on the $400 that I had paid in as estimated tax.  83% of income came from long term capital gains and the rest form dividends.  Tax tables show that I should owe $7,179 on a taxable income of $54,091.  Is the difference due to the effect of having long term capital gains or is there something wrong with TT?

[AnthonyC · Accepted solution]

Yes, it is likely the effect of having long-term capital gains.  This result would make sense provided (1) you are married filing jointly and (2) your dividends are qualified dividends (which are subject to capital gains rates).  The long-term capital gains tax rates are 0% provided that you are in the 10 or 15% tax bracket (which for married filing jointly is under $75,900).