The standard deduction first applies to ordinary income, and any deduction remaining is then applied to LTCG.Please expand on this. I'm using this tool. This is for 2025 as I'm using it to determine how I take retirement income this year.
If TOTAL income is 93K or less, then the Capital Gain portion of that income is taxed at zero percent.
https://www.irscalculators.com/tax-calculator
For a simple standard deduction of $30k for MFJ, I put in $120,700 of LTCG ($90.700+std deduction of $30k) and then $6k of ordinary income which for me is interest and the like. It spits out zero tax from income and zero tax from LTCG.
Is the tool wrong? Or are you just saying $93k is well within the zero tax range?
If your LTCG is $120700, the available deduction to you is 30k - 6K = 24K. So the taxable portion of LTCG is 120,700 - 24000 = 96700.
For 2025, the LTCG limit is 96700 for MFJ, so you will not owe any tax in this specific situation.
Statistics: Posted by p1db — Thu Feb 27, 2025 10:14 pm