Long Term Capital Gains question - do large gains push me into the higher tax bracket?

The 15% long-term capital gains rate applies to individuals with taxable income between $44,626 and $492,300 for single filers in 2025 (or $89,250 to $553,850 for married filing jointly). The 20% rate kicks in above those thresholds. Here's the important thing - when determining your capital gains rate, you include your ordinary income AND your capital gains in the calculation. So your $337.5K salary plus $1.01M in capital gains puts your total taxable income around $1.35M, which exceeds the threshold for the 15% rate. Your salary will be taxed at ordinary income tax rates, and then a portion of your capital gains will be taxed at 15% (the amount that fills up the bracket from your salary to the $492,300 threshold), with the remainder taxed at 20%.

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Don't forget about the Net Investment Income Tax (NIIT) which adds another 3.8% on investment income for high earners. With your income level, you'll be paying that on top of the capital gains rates. So your effective rate on most of those gains could be 23.8% (20% + 3.8%).

Has anyone used tax software like TurboTax or H&R Block for handling large capital gains like this? Wondering if they accurately calculate the partial 15%/20% split or if I need to go to a professional.

For what it's worth, I was in a very similar situation last year - high W-2 income plus substantial long-term capital gains from stock options. The tax software did handle the calculations correctly, but I ended up working with a CPA anyway because of the complexity. One thing that really helped was doing quarterly estimated payments once I realized I'd be in the higher bracket. The underpayment penalties can be brutal on gains this large, so definitely factor that into your planning if you haven't already made payments for this year. Also worth noting - if any of those gains are from company stock options (ISOs, NQSOs, etc.), there might be additional considerations beyond just the standard capital gains treatment. The AMT implications alone can be tricky to navigate without professional help.

This is exactly the situation I found myself in two years ago! Yes, unfortunately your capital gains DO count toward determining which bracket you fall into. With your $337.5K salary plus $1.01M in gains, you'll definitely be pushed into the 20% capital gains bracket for most of those gains. Here's how it works: Your ordinary income gets taxed first at regular rates, then your capital gains get "stacked" on top. The portion of gains that fits between your salary and the $492,300 threshold (about $154,800) gets the 15% rate, and everything above that gets hit with 20%. But here's what really caught me off guard - don't forget about the 3.8% Net Investment Income Tax that kicks in at your income level. So you're looking at an effective rate of 23.8% on most of those gains (20% + 3.8%). My advice: definitely make sure you're doing quarterly estimated payments if you haven't already. The underpayment penalties on gains this large can be brutal. I learned that lesson the hard way!

I went through this exact same situation last year with large capital gains from company stock, and yes, unfortunately the gains do push you into the higher bracket. The way it works is your ordinary income gets taxed first, then capital gains get "stacked" on top to determine which rates apply. With your $337.5K salary plus $1.01M in gains, you'll be well into the 20% capital gains bracket for most of those gains. Only about $155K of your gains (the portion that fills the gap from your salary to the $492,300 threshold) will qualify for the 15% rate. One thing that really helped me was using tax-loss harvesting to offset some gains. If you have any losing positions, consider realizing those losses this year to reduce your overall tax burden. Also, don't forget about the 3.8% Net Investment Income Tax that applies at your income level - so you're really looking at 23.8% effective rate on most gains. Definitely recommend making quarterly estimated payments if you haven't already. The penalties on underpayment for gains this large can be significant. The safe harbor rule (paying 110% of last year's tax) might be your best bet to avoid penalties while you figure out the exact amount owed.