Ordinary Income vs. LTCG sanity check

[MrGreen]

I just filed my federal taxes and I have a discrepancy between my spreadsheet and my Schedule D Tax Worksheet that I can't reconcile. I've gone over the tax worksheet multiple times and can't find an error so I'm left to think my spreadsheet is wrong. I'm hoping someone can give me a sanity check. I know the ordinary income and LTCG tax brackets were slightly uncoupled with the 2017 TCJA changes and I'm wondering if that's where I'm fouled up.

It was my understanding that ordinary income is tabulated first. My spreadsheet and the Tax Worksheet are in agreement on the amount of tax we owe on ordinary income. Then my spreadsheet calculates the remaining LTCG income space up to $94,050 as taxed at 0%, leaving ~$3,000 of LTCG taxed at 15%. However the Schedule D Tax Worksheet indicates that all the LTCG income is taxed at 0%. Is it no longer the case that ordinary income and LTCG fill the same space in tax brackets? Or perhaps I do have an error in my worksheet and I've simply been over it so many times that I'm blind to it at the moment.

[reeshau]

Do you have a deduction somewhere that you aren't accounting for, causing the tax to be zero?  A loss carryover, maybe? (Which can be up to $3,000)

[MrGreen]

Do you have a deduction somewhere that you aren't accounting for, causing the tax to be zero?  A loss carryover, maybe? (Which can be up to $3,000)

I do not.

What is driving me nuts is that the Schedule D Tax Worksheet needs to be manually filled out. I'm using the free file fillable forms for all the actual tax forms and all that looks good. I created the spreadsheet that calculates taxes owed between ordinary income and LTCG tax brackets a while back so I suppose it could be wrong but it never has been before now. I've never needed the Schedule D Tax Worksheet before though, only the Qualified Dividends and Capital Gains Tax Worksheet. This year we sold a property and had to account for depreciation.

[MrGreen]

I found it. I made an error on one of the lines on the Schedule D Tax Worksheet, just like I suspected. Joy. Now I have to amend the already submitted 1040. That's what I get for no double checking it against my spreadsheet before e-filing!

[secondcor521]

I found it. I made an error on one of the lines on the Schedule D Tax Worksheet, just like I suspected. Joy. Now I have to amend the already submitted 1040. That's what I get for no double checking it against my spreadsheet before e-filing!

That worksheet (and the Qualified Div one) are easy in the sense that each line is pretty simple.  But their sheer length and opaqueness makes them very persnickety.  I would not want to fill them out by hand.  Brave of you to do so with FFFF.

Like you I have an Excel spreadsheet that I built for a trust tax return I do.  I've quadruple checked it but it always makes me nervous - super easy to make a mistake that only shows up in certain cases, like you've just seen.

Glad you got it figured out.

[reeshau]

When I got the offer to move to Ireland (as part of a large HQ group) we built a spreadsheet of Irish taxes, to help understand what the impact on our paycheck would be.  (The other side, of course, is cost of living.  But there are a number of resources for that)  It was very instructive to build a model of Irish taxes while doing so--a crash course.  Of course, we also had many revisions as we learned more and more.  For example, our move was part of a special incentive by the government; only about 700 people were subject to it,  and we were about 100 of them.

Good way to learn things.  But, we ditched the planning spreadsheet as soon as we were actually there.  For one, the Irish government fills your form out for you!  You can change it for things they don't know about, like medical costs.  But the hard part, including the special programming, was already there for us.  We had Deloitte to fill out the first two years, but after that the only scary thing was its newness.  The process was night and day better than the death march of US taxes.