Question

Turbo tax added my capital loss to my standard deduction

Forum|Forum|2 years ago
March 7, 2024
3 replies
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I have a capital loss of $15,xxx. I understand I can deduct $3000 off my income every year until the $15,xxx is exhausted. Turbo Tax however is deducting the entire $15,xxx from my income (line 8 on the 1040) and adding $3000 to my standard deduction (line 12 shows $30,700 instead of $27,700). Is this handled correctly?

DoninGA

If you are filing as Married Filing Jointly and both you and your spouse are age 65 or older then your Standard Deduction for your filing status is $30,700

Standard deductions for 2023

Single - $13,850 add $1,850 if age 65 or older
Married Filing Separately - $13,850 add $1,500 if age 65 or older
Married Filing Jointly - $27,700 add $1,500 for each spouse age 65 or older
Head of Household - $20,800 add $1,850 if age 65 or older

V

viviankAuthor

Thanks, I didn't know that. Do you have any insight as to whether the entire $15,xxx should be report on line 8 of the 1040 instead of the $3000 allowed. TIA

DoninGA

The amount on the Form 1040 Line 8 is from Schedule 1 Line 10. On Schedule 1 there dozens of separate types of income that can be included in the amount on the Form 1040 Line 8

You will need to look at Schedule 1 and determine which types of income is being included.

If using the TurboTax desktop editions for Window installed on a personal computer, click on Forms in the upper right of the desktop program screen. If using a Mac then click on the Forms icon in the TurboTax Menu.

When in Forms mode the Schedule 1 will be listed on the left side of the screen. Click on the form to open.

Which Line number(s) on Schedule 1 have income entries?

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Mike9241

that's the standard deduction of 27700 on a joint return + 3000 for both being over 65.

VolvoGirl

What kind of loss do you have? For investments a capital loss goes on 1040 line 7 (not 😎 and is limited to a 3,000 loss for Joint (1,500 for MFS).

You get to first offset the loss against any gains you have each year so that can use more of it up. Then after applying the loss to the current gains you can take a max loss of 3,000 per year.

If you have investment sale losses, after you subtract the losses from your gains you can only deduct up to 3,000 (1,500 MFS) per year. The rest you will have to carryover until it is used up.