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carriezcool
New Member

Turbo Tax deducted $7 from my refund after I inputted $11 in interest earned- how does that make sense?

 
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SteamTrain
Level 15

Turbo Tax deducted $7 from my refund after I inputted $11 in interest earned- how does that make sense?

the tax tables only change the taxes in $50 income steps ($25 income steps if your taxable income is below $3000).

As such, adding $11 of income does nothing to the taxes due while you are in the middle of that $50 range, but as soon as you cross into the next lot....it jumps up......so it is really the tax on the whole $50 range, including $ you were not being taxed on yet.

See:

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

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

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1 Reply
SteamTrain
Level 15

Turbo Tax deducted $7 from my refund after I inputted $11 in interest earned- how does that make sense?

the tax tables only change the taxes in $50 income steps ($25 income steps if your taxable income is below $3000).

As such, adding $11 of income does nothing to the taxes due while you are in the middle of that $50 range, but as soon as you cross into the next lot....it jumps up......so it is really the tax on the whole $50 range, including $ you were not being taxed on yet.

See:

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

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

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