Turbo Tax got a tax of $3292 on a Taxable Income of $32329, but IRS 1040 Instruction Tax Table says tax should be $3464. Did Turbo Tax make a mistake?

[calguy4754]

I don't know if it makes a difference, but Form 1040 SR was used.

[rjs]

The tax table is only one of seven different methods that can be used to calculate your tax, depending on what is in your tax return. Your tax return must require one of the other methods. The most common reason that you cannot use the tax table is that your income includes qualified dividends or long-term capital gains, which are taxed at lower rates.

In the IRS instructions for Form 1040, look at the instructions for line 16. Starting at the bottom of the right column on page 32 (in the 2020 instructions) it explains the seven methods that can be used to calculate the tax on line 16.

In TurboTax you can see which method TurboTax used by looking at the 7 checkboxes in the Tax Smart Worksheet. You can see the Tax Smart Worksheet in forms mode. It's between lines 15 and 16 of the Form 1040 or Form 1040-SR Worksheet.

I don't know if there's any way to see the Tax Smart Worksheet in TurboTax Online. It is part of the "Form 1040 or Form 1040-SR Worksheet," which may not be included in the PDF of your return. If the Print Center allows you to select a specific form, printing the Form 1040 or Form 1040-SR Worksheet should include the Tax Smart Worksheet, after the form itself. In the CD/Download TurboTax software you can see the Tax Smart Worksheet in forms mode, between lines 15 and 16 of the Form 1040 or Form 1040-SR Worksheet, and you can print a specific form.

Form 1040-SR is the same as Form 1040. It just has bigger print. It doesn't matter which form is used.

[VolvoGirl]

Where do you see 3464 in the tax table?  For what filing status?

https://www.irs.gov/pub/irs-pdf/i1040tt.pdf 

Do you have any capital gains on line 7?  It depends what kind of income you have. Even though the full amount shows up in the total income on the 1040 line 7, if you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from Schedule D. The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet. It does not get filed with your return. In the online version you need to save your return as a pdf file and include all the worksheets to see it.