Tax rate is computed in error on Form 1040, line 16 when lin 17 has a number.

[MichelleLiuTorbo1]

This issue is on Form 1040, line 16. If you look at the worksheet for tax rate, it calculates $313 tax when taxable income is $75,544 on line 15,  Form 1040. This could happen when line 17 has a number of $7947.  Line 16 tax should be $8,652. Wonder how $313 is calculate.

[BillM223]

Which worksheet are you looking at? For example, Qualified Dividends and Capital Gains are calculated at a noticeably lower tax rate than ordinary income is.

You referring to line 17 is puzzling. Are you saying that line 15 is $75,544, but line 16 is $313? This can happen if the tax is calculated on a worksheet, for example, on Qua Div/Cap Gns Wks in Forms mode if you are using the CD/download software.

If you are using the Online software, please give us the amounts on lines 3a, and 7, and 15 on your 1040.

[MichelleLiuTorbo1]

I am referring to Form 1040 or Form 1040-SR worksheet. Form 1040, line 17 is from Schedule 2, line 3. According to IRS Form 1040 instructions, line 16 tax rate is based on line 15 taxable income $75,544. I am using CD/download software.  On Qua Div/Cap Gns wks in Forms Mode, $313 is present on line 22. Not sure how $313 it calculated when taxable income of $75,544 on line15.  

[ThomasM125]

First of all, if you have capital gain income reported on line 7 of form 1040, you must use the Qualified Dividends/Capital gains worksheet to calculate your tax. This can give a much lower tax than you get from using the tax tables, as the tax tables don't use the capital gains tax rates that can be much lower than ordinary tax rates.

Also, you mention that the tax on line 16 is coming from line 3 of schedule 2, Part I. This would mean your tax is comming from Form 6251, Alternative Minimum Tax. This tax could be more or less than your ordinary tax. In your case since it is less it is probably associated with the capital gains, as this can have a different treatment for AMT purposes than the ordinary treatment of capital gains.