FAQs:
Does Boldin's Net Taxable Income by Federal Tax chart include realized gains?
No
Capital gains are intentionally excluded from our net taxable income chart because that chart is specific to ordinary income subject to ordinary income tax brackets. Long-term capital gains are taxed under separate brackets and rates, which we do not yet display but are on the roadmap.
Does Boldin's tax computation take realized gains into account?
Yes
Does Boldin's Roth Conversion Explorer Tax Bracket Strategy take realized gains into account when suggesting conversions to fill the tax bracket?
Yes
Roth conversions are always treated as ordinary income, which is why using the tax-bracket solve results in fully utilizing the ordinary income tax bracket.
On an actual tax return, ordinary income and realized capital gains are combined to determine gross and net taxable income, but the tax calculation itself separates them to apply different tax rates. Our software mirrors that underlying logic while breaking the components out more explicitly, allowing users to see how each income source is taxed rather than only the final combined tax liability.