I've had a couple years where Turbo Tax results in pretty low taxes. I did just retire, so have no income, but even then seems like I would have higher taxes just based on investments. When I try to figure out where the tax calculation is coming from . .... I THINK it is the Qualified Dividends and Capital Gains Tax worksheet. Maybe that excludes a lot? I'm concerned TT isn't getting my calculated taxes right as my tax rate seems to be .5% (.005) or so. ?
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If your TAXABLE income is less than $44,625 ($89,250 MFJ) any capital gain or qualified dividends is taxed at 0%.
If you are using the CD/Download TurboTax software, go to forms mode and open the "Form 1040 or Form 1040-SR Worksheet." Scroll down to the Tax Smart Worksheet below line 15. There are 7 check boxes in the Tax Smart Worksheet. The box that is checked shows where the tax calculation comes from.
If your total taxable income (Form 1040 line 15) is less than a certain limit, your long-term capital gain and qualified dividends are taxed at 0%. The limit depends on your filing status. For 2023 the limit is $44,625 if your filing status is single or married filing separately, $59,750 for head of household, or $89,250 for married filing jointly or qualifying surviving spouse. The tax calculation would be done on either the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet, depending on other factors.
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