capital gain tax

cap_gains
cap_gains Member Posts: 3 Newcomer
in Income

We have a long term cap gain but taxable income under $96,000 (joint return) and according to what I read there should be no cap gain tax when under $96,000. But yet the gain is being taxed with this software. Anyone else see this?

Answers

  • JLFTUFreeForum
    JLFTUFreeForum Member, Star Posts: 64 image

    Here is something to read. Maybe it can help.

    Otherwise, maybe one of the agents will jump in and help answer your question.

    https://thefinancebuff.com/tax-brackets-standard-deduction-0-capital-gains.html

  • cap_gains
    cap_gains Member Posts: 3 Newcomer

    Everything I read says there is no capital gain tax because we are under the income limit. Seems it is a software problem. Anyone else see this?

  • JLFTUFreeForum
    JLFTUFreeForum Member, Star Posts: 64 image

    I wish I could answer you with a solution.

    You should do a Chat with Support.

    Log in to 2025 Return and click on Support (upper right) - when you click it the drop down shows Chat - Click on it and ask your question.

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 838 image
    edited February 24

    Hi cap_gains,

    Long term cap gains (and qualified dividends) are taxed at a lower tax bracket depending on your other sources of income. Please refer to the "Qualified Dividends and Capital Gain Tax Worksheet" on your summary page to see how your LT gains are taxed.

    Also, see this IRS website with the "Federal income tax rates and brackets" for information where your marginal tax rate would fall.

    https://www.irs.gov/filing/federal-income-tax-rates-and-brackets

    Refer to this IRS tax topic, Topic no. 409, Capital gains and losses.

    https://www.irs.gov/taxtopics/tc409

  • cap_gains
    cap_gains Member Posts: 3 Newcomer

    What am I missing when I read this from the IRS web site?

    Capital gains tax rates

    Net capital gains are taxed at different rates depending on overall taxable income, although some or all net capital gain may be taxed at 0%. For taxable years beginning in 2025, the tax rate on most net capital gain is no higher than 15% for most individuals.
    A capital gains rate of 0% applies if your taxable income is less than or equal to:

    • $48,350 for single and married filing separately;
    • $96,700 for married filing jointly and qualifying surviving spouse; and
    • $64,750 for head of household.

    I've also read this in various articles (ex Kiplingers). I thought it too good to be true. Maybe so?

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