There are seven different methods that can be used to calculate your tax, depending on what is in your tax return. Your tax return might require one of the other methods instead of the Qualified Dividends and Capital Gain Tax Worksheet.
In the IRS Instructions for Form 1040, look at the instructions for line 16. Starting in the right column on page 33 it explains the conditions for determining which of the 7 methods to use to calculate the tax.
If you are using the CD/Download TurboTax software 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 in the first section of the Form 1040 or Form 1040-SR Worksheet.
If you are using Online TurboTax, here's how to view the Tax Smart Worksheet which shows what method TurboTax is using to calculate your tax.
- In Online TurboTax open your return interview, and in the left menu column scroll down to TAX TOOLS, then subtab TOOLS.
- In the Tools window choose View Tax Summary.
- While on the Tax Summary screen go to left menu column and under Federal tab choose "Preview My 1040".
- This opens up the Form 1040 Worksheet and Schedules 1-3.
- On the Form 1040 Worksheet scroll down to between lines 15 and 16, and there should be a Tax Smart Worksheet that shows what method TurboTax used to figure your tax.
(Thanks to user mesquitebean for the instructions for TurboTax Online.)
A frequent reason that the tax on line 16 is more than expected is that you have claimed the foreign earned income exclusion. If you claimed the foreign earned income exclusion Form 2555 would be included in your tax return, and the exclusion would appear on Schedule 1 line 8d.
