I have been using Turbo Tax for 18 years. And for every one of those 18 years Turbo Tax has reported the "EFFECTIVE TAX RATE" incorrectly on the 'summary page' (i.e., the 1st page with heading "Electronic Filing Instructions ..." upon completion of the returns) for Federal Taxes and also for State Taxes. And I don't mean they got it wrong by tiny amounts. These rates are typically under-reported by several percentage points. And this continues to the the case, after many customers have complained to them about it for years.
EFFECTIVE TAX RATE depends on only TWO amounts: the "TOTAL TAX" and the "TAXABLE INCOME". Once these two amounts have been determined, EFFECTIVE TAX RATE is simply the ratio of TOTAL TAX to TAXABLE INCOME, expressed as a percentage. Both of these amounts are already reported on the summary (instructions for filing your return page, which is the first page when the return is completed), which makes the calculation extremely easy to get right.
Despite the fact that calculating taxes can be terribly complicated (e.g., when determining the TOTAL TAX and the TAXABLE INCOME), once these two amounts have been determined, the method of calculating EFFECTIVE TAX RATE is at the elementary grade level. How could Turbo Tax still be getting this so wrong?
By some estimates over 40 million tax returns use Turbo Tax, annually. This, despite the fact that Turbo Tax has apparently been unable to recognize and correct this problem for at least 18 years.
