Apologies in advance for me not being able to find the simple answer to this simple question!! (Why is that? It is such an obvious question)
If my wife and I have taxable income less than $89,250 we will be in the zero tax bracket for LT capital gains.
So if our taxable income consists of $60,000 ordinary income and $29,000 in long term capital gains we will pay income tax on the $60k but no additional tax for the $29k in LTCG because our total taxable income of $89,000 is below the $89,250 limit.
Our tax bill would be the same whether the LT gains were $15k, $25k, or $29k.
But what happens if our LTCG are $30,000? In this case our taxable income is now $90,000, just barely over the zero bracket limit but puts us into the 15% bracket for long term capital gains.
My question is, would this subject our entire $30,000 LTCG to a 15% income tax? Is there a cliff, or do I only pay 15% on the amount exceeding the $89,250 limit?
I'm sure this question has been asked and answered 1000 times but I can't seem to find it and I am getting a headache!
All this prompted by the IRS letting me know I left out several stock transactions on my 2022 return (yes, I simply misread my broker's report and left out several trades!) so the net result is more long term capital gain income and I am trying to figure out how that affects my taxes owed. Thank you!