Solved: Turbo Tax says my 2018 Federal Income Tax is $13,840.00 on Taxable Income of $99,874.00. When I read the tax table I come up with $13,852.00. Who is correct?
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Turbo Tax says my 2018 Federal Income Tax is $13,840.00 on Taxable Income of $99,874.00. When I read the tax table I come up with $13,852.00. Who is correct?

 
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Turbo Tax says my 2018 Federal Income Tax is $13,840.00 on Taxable Income of $99,874.00. When I read the tax table I come up with $13,852.00. Who is correct?

The tax table is not the only source of tax calculation.  There are times when you need to use other methods to calculate your tax due - one reason being tax rates can be different depending on the source of income.

Is any of your income from dividends or capital gains? If they were qualified dividends, then capital gains tax rates would apply to those dividends.  Capital gains tax rates are often lower than regular tax rates, and long term capital gains rates can be as low as 0% for those in the 10 and 15% tax brackets.  

In these cases, TurboTax uses the Qualified Dividends and Capital Gains Tax Rate worksheet to calculate your tax due (per the IRS).  

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Highlighted
Level 7

Turbo Tax says my 2018 Federal Income Tax is $13,840.00 on Taxable Income of $99,874.00. When I read the tax table I come up with $13,852.00. Who is correct?

The tax table is not the only source of tax calculation.  There are times when you need to use other methods to calculate your tax due - one reason being tax rates can be different depending on the source of income.

Is any of your income from dividends or capital gains? If they were qualified dividends, then capital gains tax rates would apply to those dividends.  Capital gains tax rates are often lower than regular tax rates, and long term capital gains rates can be as low as 0% for those in the 10 and 15% tax brackets.  

In these cases, TurboTax uses the Qualified Dividends and Capital Gains Tax Rate worksheet to calculate your tax due (per the IRS).  

View solution in original post

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