Tax Bracket went up from 12% to 22% but still paying 12%

[mau3535]

Can someone please tell me what I am missing?

There are 2 scenarios for 2023 taxes. MFJ, standard deduction.

Scenario 1 - Taxable income = $84539.00 

                       Tax = $9679.00 (12%)

Scenario 2 - Taxable income = $94369.00

                       Tax = $11313.00 (12%) 

Turbo tax is telling me my tax bracket went from 12% to 22% but in both calculations above

Turbo Tax's calculation is still 12% in scenario 2. Shouldnt it be ($20761.00) 22%?

Thank you!

[JohnB5677]

This is just a guess, but are you on Social Security?

• If you are, the difference between Married Filling Jointly and Married Filling Separate can be devastating.
• If they are married filing jointly, they should take half of their Social Security, plus half of their spouse's Social Security, and add that to all their combined income. If that total is more than $32,000, then part of their Social Security may be taxable.
• Married filing separately and lived with their spouse at any time during 2023.  All income and up to 85% of Social Security is taxable.

You can see the amount of taxable Social Security on line 6b of your form 1040.

You can preview your tax return by going to:

1. On the menu bar on the left that shows.
2. Select Tax Tools
3. On the drop-down select Tools
4. On the popup menu
5. Select View Tax Summary
6. On the left sidebar
7. Select Preview my 1040.
8. Schedules 1,2&3 are included if you scroll down past your 1040.
9. To return to the entry screens press Back on the sidebar.

If this wasn't your issue, reach out again and please provide additional details.

[mau3535]

Thank you for your quick reply. We are not on social security just yet. Just 2 W2s and a few stock sales, standard deduction.

Thanks

[DoninGA]

With having stock sales on your return the taxes on your taxable income is not calculated using the IRS tax tables but either the Qualified Dividends and Capital Gains Worksheet or the Schedule D Tax Worksheet will be used to calculate the taxes.

[JohnB5677]

Please clarify your question.

• What are the two scenarios
  • MFJ, standard deduction.
  • What is the second?
• If your stock transactions were short term they would be linked to the tax table.
• Your income would correctly show your marginal tax rate to increase from 12% t0 22%
•  
• 

Please let us know the details.

[mau3535]

Thank you. Both scenarios are MFJ. The second scenario does include stock sales which pushed us into the 22% but the "Tax" is still being calculated at 12%

[mau3535]

Thank you. Both scenarios are MFJ. The second scenario does include stock sales and dividends which pushed us into the 22% but the "Tax" is still being calculated at 12%

[Vanessa A]

That depends on how much the Capital Gains were and what type they were.  Capital gains are taxed separate from your regular income.  The Capital Gains rate ranges from 0% to 20%, so it is possible that none of your stock sales created taxable income.   If you were in the 12% rate to start with, your income would be under $89,250 for MFJ.  If your overall income is less than $89,250, you would be at the 0% Capital Gains rate.  Your regular wages would still be in the 12% rate and your capital gains would be 0%.  This would apply if your stock sales were long term sales, as they do not push you into the next tax bracket.

If they were short term sales (you held them less than 12 months), and you are not seeing any difference, then you  need to go back into the investment section and double check to be sure you have them reported as short term instead of long term.