Tax Bracket: what type of included is used to identify your tax bracket?

[Anonymous]

Hi Community - hope you are doing well.

I am a bit confused. As understood, will most of the income besides (LT capital gain) per year determine a tax bracket? For example, if one makes $40k and has a standard deduction but has a taxable LT capital gain of $300,000, then his/her tax bracket will be determined based on ($40k - $13,850). Is it correct? 

I see sources references to look at "taxable income" to identify a tax bracket, but I think it is misleading.

[KrisD15]

No, it is a bit more complicated than a simple computation based on wages.

Taxable income is after the Standard or Itemized deduction is used.

It can also be adjusted by IRA contributions, student loan payments and other adjustments reported on Schedule 1. 

Capital Gain/Loss can also increase (or decrease) taxable income. 

Marginal Tax Rate is the highest bracket you attain. 

Effective Tax Rate is the average. 

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