I'm about to switch gears and start drawing down from my taxable accounts and am trying to do some basic tax planning. Having run a business for my career with many outside investments, I had always leaned on my accountant to do my returns so have not dived into the weeds. Now, I am trying to run some very simple analysis, but feeling like I am missing something when I compare my simple by hand math with an online calculator. Perhaps some of you can help me see the light using the simple examples below.
Constants: Married Filing Jointly/Standard Deduction $24,800/Up to $80K 0% Tax, over $80K 15% Tax
Scenario 1: $200K Long term Capital Gain is only income
Calculator spits out Fed tax of $22,109 and I cannot figure out the math...
- $200,000 x 15% = $30,000?
- $200,000 - $24,800 = $175,200 x 15% = $26,280?
- $200,000 - $80,000 = $120,000 x 15% = $18,000?
Dots are not connecting??
Scenario 2: $200K Long Term Capital Gain + $25K Earned Income
Calculator spits out Fed tax of $26,809.
How do I reconcile this with simple math?
Constants: Married Filing Jointly/Standard Deduction $24,800/Up to $80K 0% Tax, over $80K 15% Tax
Scenario 1: $200K Long term Capital Gain is only income
Calculator spits out Fed tax of $22,109 and I cannot figure out the math...
- $200,000 x 15% = $30,000?
- $200,000 - $24,800 = $175,200 x 15% = $26,280?
- $200,000 - $80,000 = $120,000 x 15% = $18,000?
Dots are not connecting??
Scenario 2: $200K Long Term Capital Gain + $25K Earned Income
Calculator spits out Fed tax of $26,809.
How do I reconcile this with simple math?