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Level 1

Should T-Tax recalulate my tax bill when going to lower tax bracket? IRA contribution put us in lower tax bracket and we do get full deduction (we checked).

In T-Tax, our new 'taxable income' is correct (and in lower bracket now) but the tax due is calculated using higher tax bracket. 

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Level 20

Should T-Tax recalulate my tax bill when going to lower tax bracket? IRA contribution put us in lower tax bracket and we do get full deduction (we checked).

Oh, I should have said there could be other things like the SE tax and penalties being added in.  Glad you figured it out.

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Level 20

Should T-Tax recalulate my tax bill when going to lower tax bracket? IRA contribution put us in lower tax bracket and we do get full deduction (we checked).

How do you know it's using the wrong bracket?  Yes Turbo Tax recalculates it everytime you make an entry.  

If you have the Desktop program you can switch to the Forms Mode and open the Tax worksheet and see how it's calculated.  Probably on the Qualified Dividends and Capital Gain Tax Worksheet.
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Level 1

Should T-Tax recalulate my tax bill when going to lower tax bracket? IRA contribution put us in lower tax bracket and we do get full deduction (we checked).

I compared the tax rate schedule for our taxable income($29498 owed) to what Turbo Tax calculated  ($31864).  So seems it used 28% tax rate, not 25%. BUT, thanks to your info ...  although I can't find that worksheet in the forms, I did see that on line 44 on 1040, tax is correct at $29498.  THEN, my self-employment tax got added to come up with the "total tax" ... that is why it looks like higher tax rate applied.   Thank you so much for your great advice!
Level 20

Should T-Tax recalulate my tax bill when going to lower tax bracket? IRA contribution put us in lower tax bracket and we do get full deduction (we checked).

Oh, I should have said there could be other things like the SE tax and penalties being added in.  Glad you figured it out.

View solution in original post