Tax Planner - long term capital gains

SomebodyInGNV

:/ I have a problem with the tax planner. It's not calculating tax on LTCG. I'm testing the threshold between 12% and 22% brackets for MFJ. 2021 LTCG rate should be 0% for taxable income up to 80,800. That's slightly different than the margin for 12% vs 22%, which is 81,500.

My problem is I see no difference in income tax with or without adding LTCG in the tax planner, for taxable income of 80,800, 80,801, 81,500 or 81,501. I'm forcing that change with a schedule withdrawal from an IRA, which the tax planner treats correctly as ordinary income.

I should see additional tax of 15% for taxable income of 80,801, but there is no change in remaining tax due. Thinking the developers missed the difference between the 0/15 threshold for LTCG and the 12/22 threshold for ordinary income, I simulated taxable income at both levels but didn't see the 15% tax on LTCG.

Can anyone replicate this? Yes, I know I shouldn't use Quicken as my tax software but the integration between cash flow, investments and taxes is the only reason I still use it. I would confirm the planner output with tax software before taking actions based on Quicken, but it's nice to be able to estimate results without having to transcribe data into a different program.

markus1957

I checked this after the planner was updated for 2021; it was correct then.  I checked again today and it is still correct.  FYI, the 22% rate is 81,050. 

It's easiest to test the bracket cutoffs in a test file and manually enter values.  In a new test file enter $25,100 of interest to cancel out the standard deduction.  Then use various short term gain entries to test the bracket cutoff calculations; $81,050 will give correct tax of $9,328.  Add $100 dollars to that and tax will go up $22.

Return short term gains value to $0 and enter $80,800 of long-term gains, tax owed is $0 as it should be. Enter $80,900 and tax will be $15 as it should be.