Why is the tax on my 1040 form Line 16 different from the amount I look up on the tax table based on Line 15 (taxable income)?

[ToddL99 · Accepted solution]

You have capital gains or qualified dividends.

While these two categories are added into Adjusted Gross Income and thus show up on line 11 of the 1040, they cause the tax computation to change, because ordinary income is taxed at one rate, and capital gains and qualified dividends are taxed at a lower rate.

The result is that when you have capital gains and/or qualified dividends, then the tax on line 16 is somewhat lower than it would have been in the tax tables.

Look for a Qualified Dividends and Capital Gains Tax Worksheet (Qual Div/Cap Gn) in your output forms which should explain how the tax was computed.

[ajspak]

Thanks! That explains it.

[lodiecares]

I did not have a lump sum distribution nor a child to report. I am a retired Military over 70 years old and my only income is from my military pension and social security. Have a rental property showing a loss of $4K something. I cannot understand why I am being taxed on any of these.  Thank you for your response. 

[MarilynG1]

Most military pensions are taxable for Federal purposes, if you received Form 1099-R.  Depending on the amount of your pension, some of  your Social Security income may become taxable as well.  Your income would be reduced by your Rental Loss, as you mentioned. 

If you received a CSA-1099-R, click this link for How to Enter a CSA-1099-R.

If you're using TurboTax Desktop, you can review calculations in FORMS mode. 

If you are referring to a specific State return, please give more details and we'll try to help.

Here's more info on Taxes for Veterans, and Is My Social Security Taxable?

Thank you for your service. 

@lodiecares

[lodiecares]

Thank you for your feedback. 

Yes, I am aware of everything you said. I know that part of the SS payment is taxable and I see that in the return. I have been receiving this pension for years and knows that it is taxable. It goes up a little bit every year. I see that the rental loss was subtracted from the income.  I checked and triple checked all my entries and did NOT find anything that should require this additional tax. I did not have it on prior years return. I have no dividends nor any capital gain either. Strictly SS and the military pension. What am I not understanding. I have been doing tax for a long time and had volunteered once with the AARP tax for seniors. 

[DianeW777]

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

TurboTax Online:

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

TurboTax CD/Download:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax CD/Download for Windows
2. Select 'Send Tax File to Agent'
3. Write down or send an image of your token number then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return which will allow us to open it. 

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution. 

@lodiecares