When I go to the Capital Gains section, it says that I would pay 15% taxes. But that doesn't match what I owe, which is twice as much. What am I not understanding?

[JohnB5677]

What is listed on your tax return?

From the left sidebar

1. Select Tax tools
2. Hint: You may have to minimize the Federal and State selections
3. Click Tools
4. A Menu will pop up
5. Select View tax summary
6. On the left panel click Preview my 1040
7. Capital gain is on line 7
8. For greater detail you may have to pay to see Schedule D

Some Key numbers to compare:

• 11 Adjusted Gross Income
• 12 Deductions
• 15 Taxable income
• 16 Tax
• 33 Total Payments
• 34 Overpayment
• 35a Refund
• 37 Amount you owe

There are two types of capital Gains

• Short term (under 366 days) 
  • These are taxed at you regular income tax rate.
• Long term ( over one year)
  • These are taxed at  maximum of 15% unless your regular tax rate is lower

If you have investment gains and losses they are combined for each category (Short & Long) and then taxed.

If the combination of both turns out to be a loss, you can only take a maximum of $3,000 less in one year.

If there is an excess of loss, it will be carried to the following years.

There are multiple other conditions that may come into play, but these are the basics.

Please see Capital gains and losses

[msbz123]

I checked all that, thank you. But the thing I can't figure out is why it's so much higher than it should be. I'm paying twice as much in capital taxes than it should be. They were long-term gains and based on our income level, they should have been paid at 15%. But somehow it's costing us twice as much. How could that be? What am I missing?

[Hal_Al]

Review the "Qualified dividends and capital gains worksheet" for detailed calculations. 

[msbz123]

Sorry, I can't seem to find where that is?

[Hal_Al]

abbreviated "Qual Div/Cap Gn" on the forms list

[msbz123]

Sorry this is so difficult but I am using Turbotax online and I don't seem to have access to forms. What can I do?

[Hal_Al]

   With online TurboTax you do not have direct access to the forms and schedules until you pay your fees.     Before then, you can only preview your 1040 and the three schedules.

PREVIEW 1040

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

[msbz123]

Okay, so now I can see all that but the original question still stands. I can see that I owe twice as much as the capital gains tax should cost me. 

What I need to know is why this number is, what it is.

We've paid taxes as we should have for wages and have these capital gains and also some miscellaneous income. But all that taxed, doesn't total the additional taxes we owe - it should be much less. So how is this happening?

[Hal_Al]

Do you see on the qualified dividends and capital gains work sheet where the error is? 

You may need to contact TT support where you can get somebody to actually look at your numbers.  

To contact TurboTax (TT) support:

https://ttlc.intuit.com/turbotax-support/en-us/help-article/account-management/contact-turbotax/L2y9...

What is the TurboTax phone number? https://ttlc.intuit.com/turbotax-support/en-us/help-article/account-management/turbotax-phone-number...

[msbz123]

Thanks - I'll pursue that then.

[msbz123]

So I was able to reach someone but that someone wasn't all that helpful. Ultimately, he thought I would probably have to clear the entire form and start from scratch as maybe there was a glitch somewhere.

However! I was able to find one weird thing that might be causing some problems, which is that a distribution from a 529 for qualified medical expenses is listed as miscellaneous income. How can I tell if that is actually the case? I see it listed in the wages and income section under Miscellaneous Income, 1099-A, 1099-C. Can I see if that is being brought over to income that is untaxed and that's why we have so much in taxes owed? (I tried to calculate this but it's a bit of apples to oranges as far as I can tell - maybe there is an easier way to tell?)

[Hal_Al]

 529 for qualified medical expenses?

is listed as miscellaneous income?

income section under Miscellaneous Income, 1099-A, 1099-C? 

That doesn't make any sense to me.  You're probably going to have to get live or in person help. 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/product-setup/connect-tax-expert-turbota...

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-expert/meet-expert-person/L4dD4nqvo_...

[msbz123]

Oh, no, that didn't make any sense at all. I'm so sorry!

It was a distribution from a 529 education account for qualified education expenses.

My understanding was that money distributed to pay for these expenses would not be taxed. So I'm wondering if that amount was in the other miscellaneous section and somehow was being added to our taxable income. But from adding various income amounts, I can't tell where that 529 amount would have been added. So that is my question.

[Hal_Al]

Taxable 529 would show up on line 8z of Schedule 1 with a "Qual state (or private) tuition prgm from 1099-Q" notation.  That might explain extra income resulting in extra tax, but your original post specifically said your capital gains were being double taxed. That shoulda shown on the Qual div & CG w/s.

TurboTax mistakenly taxing the 529 earnings is a common problem, but with an easy fix: delete the 1099-Q.

The 1099-Q is  only an informational document. The numbers on it are not required to be entered onto your (or your student's) tax return. The interview is complicated and it's easy to make mistakes. Avoid it if you can. 

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records (you don’t need it). You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships.

References:

1. On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution." 
2. IRS Pub 970 states: “Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return”.
3. "IRS Publication 970, Tax Benefits for Education states: If the entire 1099-Q went to qualified expenses, room and board, tuition, etc; then, you do not need to enter the form."