Blended Tax Rate

7 replies
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I am hoping someone can provide clarification as to what the Blended Tax Rate is and what factors it takes into consideration. Using the Blended Tax Rate, Turbo Tax is calculating my tax liability to be about $300 more than the amount estimated from the IRS 2019 tax table and I am unsure why. Thank you in advance.

NCperson

Level 15

where do you see reference to a "blended tax rate"

are you self employed? (the tax table won't include the self employment tax related to social security)

Rebecca_55Author

Level 2

It is after my Federal Review. There is an area where you can view Turbo Tax's calculations to see how they calculated the amount of tax owed. No, I am not self-employed.

Aj7071

Level 2

I have the same question. How is the Blended tax rate calculated and how is it different from the Effective tax rate, which I am not seeing on that same page after my federal review?

IRS Taxpaper hostage

Level 2

Something not right with Turbo Tax. I need to use the IRS Computation Sheet and they say my tax rate is 22%, yet Turbotax has their own name for it, called a "Blended Tax Rate" and say it is 14.4%. Who is right? I don't see "Blended Tax" in the IRA book. It concerns me because I may be fined later on for not paying enough taxes and where will Turbotax be when the IRS knocks on my door? Your numbers change every time I go back to review. I completely removed my husband's traditional IRA contribution because according to the IRS, my husband is ineligible to take any of it, but Turbotax keeps changing it to a converted Roth which is incorrect, and they keep selecting that I have made a contribution which is incorrect. I have to keep deselecting these boxes. What is wrong with your system. Why do I have to pay a fortune to get help from you when your system appears to be flawed? Doing my own taxes the what the IRS wants gives us 7929 refund. You magically say we will get 7993 because we owe "blended" taxes.

Rebecca_55Author

Level 2

Once I printed the actual 1040 for review, the term "Blended Tax Rate" was no longer used and the "Effective Tax Rate" was represented. My tax owed is exactly what the Tax Table from the IRS 1040 instructions represents. I originally had confusion as I owed additional monies for a premium tax credit I was no longer qualified for. However, Turbo Tax did not break this down until the actual 1040 was printed (at this point you must pay for TurboTax), so I thought my tax owed was being over-estimated. Also, after speaking with a representative from TurboTax Live, they explained that the term "Blended Tax Rate" is not an official term and is not referring to anything regarding self-employment, etc. They agreed that it was a confusing term.