topic Ill look at the forms view in Get your taxes done using TurboTax

Why did increasing my income by 6% increase my federal taxes by 53%

irishda53 — Thu, 06 Jun 2019 10:19:41 GMT

Using TTAX 2016 Home and Biz.

Initial import of income from Quickbooks was too low compared to actual sum of 1099's received. I corrected the amount in the inputting of the 1099's. Income went up 6%. OK fine, but with all else exactly as inputted the Fed tax jumped 53%!! I backed out the increase and it went to where it was before so it's all related to the increase.

What's the problem? I expected SOME increase in tax liability but this was nuts!

Regular tax plus self-employment tax. Also, deductions an...

SweetieJean — Thu, 06 Jun 2019 10:19:42 GMT

Regular tax plus self-employment tax. Also, deductions and credits can go down as your income goes up.

What dollar amount did it go up? Did you have health ins...

TaxGuyBill — Thu, 06 Jun 2019 10:19:43 GMT

What dollar amount did it go up?

Did you have health insurance through the Healthcare Marketplace, and enter a 1095-A?

Fed tax was $9320, jumped to $17,282. That's huge!! State...

irishda53 — Thu, 06 Jun 2019 10:19:45 GMT

Fed tax was $9320, jumped to $17,282. That's huge!! State refund of $323 vaporized and became a debt of $417.

No Marketplace insurance or 1095-A

irishda53 — Thu, 06 Jun 2019 10:19:47 GMT

No Marketplace insurance or 1095-A

What was the dollar increase in income? And which state?

SweetieJean — Thu, 06 Jun 2019 10:19:48 GMT

What was the dollar increase in income? And which state?

With just a 6% income increase

irishda53 — Thu, 06 Jun 2019 10:19:49 GMT

With just a 6% income increase

Dollar increase was $25000 in Callifornia

irishda53 — Thu, 06 Jun 2019 10:19:51 GMT

Dollar increase was $25000 in Callifornia

and that's an 85% increase in Federal taxes, not 53%.

SweetieJean — Thu, 06 Jun 2019 10:19:53 GMT

and that's an 85% increase in Federal taxes, not 53%.

You see why I use TTax

irishda53 — Thu, 06 Jun 2019 10:19:55 GMT

You see why I use TTax

So your income increased by $25,000. For that to be a 6%...

SweetieJean — Thu, 06 Jun 2019 10:19:57 GMT

So your income increased by $25,000. For that to be a 6% increase, your prior income must have been over $416,000. Is that right?

It was $395,000, went to $420,000

irishda53 — Thu, 06 Jun 2019 10:19:58 GMT

It was $395,000, went to $420,000

I'm wondering if you are misstating or misunderstanding s...

TaxGuyBill — Thu, 06 Jun 2019 10:20:00 GMT

I'm wondering if you are misstating or misunderstanding something. Was you TOTAL federal tax (Line 63 of Form 1040) $9230, or was $9230 the amount that you owed?

"Fed tax was $9320, jumped to $17,282. That's huge!! Stat...

SweetieJean — Thu, 06 Jun 2019 10:20:01 GMT

"Fed tax was $9320, jumped to $17,282. That's huge!! State refund of $323 vaporized and became a debt of $417."
It does sound like $9320 was what you owed.

Thanks SweetieJean but looking at it another way the tax...

irishda53 — Thu, 06 Jun 2019 10:20:03 GMT

Thanks SweetieJean but looking at it another way the tax against the income was 2.3% and went to 4.1%. almost double. Don't know if $8000 is small not that much to you but it huge to me.

Ill look at the forms view

irishda53 — Thu, 06 Jun 2019 10:20:05 GMT

Ill look at the forms view

Please answer TaxGuy Bill's question above so that we can...

SweetieJean — Thu, 06 Jun 2019 10:20:06 GMT

Please answer TaxGuy Bill's question above so that we can figure out what's going on.
Also, everything is relative. $425,000 of income is huge to many folks, and paying only 2 or 4% in taxes on that seems very low.
<a rel="nofollow" target="_blank" href="http://fairmark.com/general-taxation/reference-room/2017-tax-rate-schedules/">http://fairmark.com/general-taxation/reference-room/2017-tax-rate-schedules/</a>

No, the total tax was probably not $9320. Look at Line 6...

TaxGuyBill — Thu, 06 Jun 2019 10:20:08 GMT

No, the total tax was probably not $9320. Look at Line 63 of your Form 1040. THAT is your total tax.

it was the amount that I owed. Actual tax line 63 $56,362

irishda53 — Thu, 06 Jun 2019 10:20:09 GMT

it was the amount that I owed. Actual tax line 63 $56,362

Forgive me, I'm a bit grumpy about this and it's late.

irishda53 — Thu, 06 Jun 2019 10:20:11 GMT

Forgive me, I'm a bit grumpy about this and it's late.