I am seeing a contradiction using the Premium web product. On one hand, under the question "How does the net long-term gain of $8315 affect my return?", the following answer appears:
"Long-term capital gains are generally taxed at preferential tax rates. Based on the information you've provided so far, the $8,315 will be taxed at 0%. This means you didn't have to pay any capital gains taxes on this amount. Congrats!". This seems to follow IRS rules at my income level as I understand them, with room to spare.
However, the same box 2a entry is creating an obvious tax due in the calculation. I have removed and replaced the entry to be sure. What gives?
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other income can push long-term capital gains into a higher tax bracket.
in your return, there is a long-term gain and qualified dividend worksheet that computes the tax. If you are using online, you won't be able to access it until you pay your fees.
Even though the LTCG is taxed a 0%, the LTCG does add to your AGI. Many things on a tax return can depend on your AGI, so there are many possible side effects that can result from the increase in your AGI, such as increasing the taxable amount of Social Security benefits or decreasing some amount of a tax credit.
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