Why is my tax rate 26.2% of my AGI when I fall in the middle of the 22% tax rate? I paid quarterly 25% as a 1099, married jointly. Thank you for your help.

[MinhT1]

Your income on form 1099-NEC is subject to income tax AND self-employment tax. 

Self-employment tax is calculated at 15.3% on 92.35% of your self-employed income and is added to your income tax.

This explains your high blended tax rate.

[Rick168]

I thought TT would have broken that down somewhere to avoid confusion.

However, following your calculations my tax owed should be $2400 less than TT is figuring.

123,105x92.35%=113,687x15.3%=17394 added to agi 144294=161688x.22 taxable rate = 35,571. 

Turbo Tax has me at $37933.     

Am I missing something this year that I have not in the past 15?

Thanks again

[MinhT1]

The Self-employment tax isn't added to AGI to be taxed, like in your calculation.

SE tax is a tax which is added to income tax on your taxable income.

Look at the tax table from page 3 of this IRS publication for the income tax on your taxable income, then add self-employment tax to arrive at your tax liability.

[Rick168]

Did the worksheet and came up with $22.359 that should go into line 16.   Since that is not added to the AGI, at what rate is it taxed? The AGI of 144294 is taxed at 22%, then tax added from the 22,359.   

🤔

[ThomasM125]

Line 16 on your 2023 form 1040 is your federal income tax. So I don't know why you are asking at what rate it should be taxed. 

Your taxable income is taxed at several rates. If you are married filing joint, the first $22,000 is taxed at 10%, the next $67,450 at 12%, the next $101,300 at 22%. The amount on line 15 of your form 1040 would be your taxable income on which these rates would be applied in most instances. You may have capital gain income that could be taxed at lower rates or other taxes such as an investment income tax that would affect your income tax as well.

I suggest you apply the graduated tax rates to the amount on line 15 of your form 1040 and add your self-employment tax and any other taxes on lines 17 to 23 of your form 1040 to better understand how your tax is being calculated.