topic TurboTax Incorrectly Calculating a Tax Bracket after adding Traditional IRA contribution in Get your taxes done using TurboTax

TurboTax Incorrectly Calculating a Tax Bracket after adding Traditional IRA contribution

architect587 — Tue, 10 Feb 2026 11:27:59 GMT

Hello,

I am doing taxes 2023 as married filing jointly with taxable income for 2023 is $192,571. According to the tax bracket schedule this puts me in the 24% tax bracket, which brings total tax $33,017. Since the 22% tax bracket finishes at $190,750, I am planning to reduce the taxable income to get into that tax bracket.

Since I already have 401(k) at work, when I add info to TurboTax about my spouse's contribution of $2,600 to Traditional IRA contribution, the taxable income drops to $189,971 (which is already in 22% tax bracket), however I still get the 24% tax bracket tax -> $32,409.

After moving from 24% to 22% tax bracket, with taxable income ~ $190,000 I would expect 2% reduce in taxes (~$3,800), however TurboTax displays just $607 reduce ($33,017-$32,409), which looks proportional to $2600 decrease in taxable income ($192,571 - $189,971)

Why is TurboTax taxing $189,971 married filing jointly with 24% instead of 22%?

Re: TurboTax Incorrectly Calculating a Tax Bracket after adding Traditional IRA contribution

dmertz — Sat, 17 Feb 2024 17:39:34 GMT

" I would expect 2% reduce in taxes (~$3,800)"

Your expectation is incorrect. The marginal tax rate of the $2,600 is ($33,017-$32,409) / $2,600 = 23.4%. Only $1,821 of the $2,600 was being taxed at 24% and the other $779 was already being taxed at 22% (as is all of the other taxable income between $89,451 and $190,750).

Re: TurboTax Incorrectly Calculating a Tax Bracket after adding Traditional IRA contribution

architect587 — Mon, 19 Feb 2024 14:21:51 GMT

Thanks for the clarification👍