My long term Capital gains are added to regular income for tax calculation by turbo tax. has anyone else experienced this?

[Sid-Gupta]

my long term capital gains on stock transactions should be taxed at 20% and i see that all of these transactions are marked as box D or E on 1099B. when i compare turbo tax calculation with my hand calculation using IRS rates, it seems like turbo tax is using regular income tax rates for these long term capital gains. how do i correct this?

[Anonymous]

capital gains regardless of LT or ST will always be added to your income and thus be included in adjusted gross income and taxable income.

in TT there's qual div/cap gain worksheet where the special rates will be applied to LTCG and qualified dividends. you can check by scrolling down on the 1040 wks until you see the Tax Smart Worksheet. you should see line A4 checked

[Sid-Gupta]

Thanks. I did expect the capital gains to be shown on my returns. but the tax calculation was off between my math and turbo tax calculation. and the difference was about how much i would have seen if long capital gains were considered as regular income. anyways, i figured the missing piece in my calculation. i did not know about the additional medicare tax and NIIT. if i add that, then my calculation aligns with turbo tax. since i am using turbo tax and not a CPA for the first time in 7 years, thought of doing a thorough check to make sure i get it right and understand my return well.