Author Topic: Republican Tax Plan 2017 - capital gains income thresholds  (Read 859 times)

mikescepaniak

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Republican Tax Plan 2017 - capital gains income thresholds
« on: January 05, 2018, 08:54:05 AM »
I've read that "Under the Tax Cuts and Jobs Act, the three capital gains income thresholds don't match up perfectly with the tax brackets. Instead, they are applied to maximum taxable income levels..."
-- https://www.fool.com/taxes/2017/12/22/your-guide-to-capital-gains-taxes-in-2018.aspx

What does "maximum taxable income levels" mean? Is this still equivalent to line 43 of my 1040 - "Taxable Income"? Meaning, my AGI minus (simplistically) the new standard deduction? Thanks.


Mike.....

mikescepaniak

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Re: Republican Tax Plan 2017 - capital gains income thresholds
« Reply #1 on: January 05, 2018, 05:17:54 PM »
I heard back from my accountant. In short, the answer is "yes". "Maximum taxable income" is equivalent to line 43 of the 1040 - "Taxable Income".


Mike....

MDM

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Re: Republican Tax Plan 2017 - capital gains income thresholds
« Reply #2 on: January 11, 2018, 08:13:22 PM »
The income levels in the tables are adjusted gross, correct?
No.  Taxable income.  Line 43 of 2016 Form 1040 - f1040.pdf.

MDM

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Re: Republican Tax Plan 2017 - capital gains income thresholds
« Reply #3 on: January 11, 2018, 09:14:39 PM »
Hah...I'm lost.

How about if that same couple had $24Kish of that $100K income put in a 401K and another $6800 or so put into an HSA?  Would they then be in a 0% capitals gains bracket?

As you can see, trying to figure out how this basically works.
1) Are you familiar with how your W-2 works, in terms of your gross income and the various pre-tax and post-tax deductions that you may have?

2) And then how Form 1040 works?

Start with #1, and once you understand what goes on Form 1040 Line 7, go through the rest of Form 1040.

Opening up the tax black box and looking inside is probably the best way to become unlost.