Where is Tax Bracket calculations by TurboTax

[pod73811]

Married filing joint return.We have ordinary income that is fairly low  but Long term capital gains that are substantial. I believe that up to a certain point ($78,750) taxes on ordinary income is 12% and long term capital gains is 0% until we cross over into the 22% bracket and then only the amount of over the 22% threshold are taxed at 15%. My question is how do I know TurboTax calculated this correctly? I see no worksheet that shows a breakdown of what income went into which tax bracket. Is there a way to find this out?

[rjs]

The bracket boundaries for ordinary income and for long-term capital gain are different. For 2022, married filing jointly, the top of the 12% bracket for ordinary income is $83,550. The top of the 0% bracket for long-term capital gain is $83,350. The brackets apply to your total taxable income, including the capital gain.

Your tax has to be calculated using one of seven different methods, depending on what is in your tax return. If you don't have any unusual situation or type of income, the calculation of your tax is probably done on the Qualified Dividends and Capital Gain Tax Worksheet. The calculation is fairly complicated. You can work through the calculations on the worksheet and see what it's doing, but you will not see a simple table that shows the amount of income in each bracket.

[pod73811]

Thank you for that answer. I checked the Qualified Dividends and Capital Gains Tax Worksheet but as you said, it is a complicated breakdown that does not really provide the answers I am looking for. This is the first year I have to send Uncle Sam and NYS a sizeable tax payment so trusting TurboTax without being able to verify the computations is not easy.

[rjs · Accepted solution]

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@pod73811 wrote:

trusting TurboTax without being able to verify the computations is not easy.

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You can verify the computations, but not in the simplified way that you visualize it. TurboTax did not invent the Qualified Dividends and Capital Gain Tax Worksheet. It's straight out of the IRS Instructions for Form 1040. TurboTax is just following the IRS instructions for calculating the tax. You can take the worksheet from page 36 of the IRS instructions and work through it yourself to confirm that TurboTax did it correctly. Make sure you follow the instructions on the worksheet to the letter. On lines 22 and 24 you will need either the Tax Table or the Tax Computation Worksheet, which are also in the IRS instructions, on pages 63 and 75.

[pod73811]

Hello rjs,

Your info was most helpful. After checking the tax tables from the IRS 1040 instructions and doing my own computations, I feel more confident that my return is accurate. Thank you