topic Taxes Owed in Get your taxes done using TurboTax

Taxes Owed

DaveL — Thu, 07 Feb 2019 19:27:59 GMT

Tax owed for Turbo tax taxable income of 76,475(from Line 10 - 1040) = 8,676(from Line 11a - 1040).

IRS 2018 Tax(tax tables - jointly) owed for Turbo tax taxable income of 76,475 = 8,796

Why the difference?

Re: Taxes Owed

NCperson — Thu, 07 Feb 2019 21:16:03 GMT

I a, having trouble understanding which of the two numbers calculated below are from Turbo tax and which one you calculated on your own. Can you please clarify that.

I "dummied' a return in TT and got $8796 which is exactly what the IRS tables have, see page 13 of the link below

https://www.irs.gov/pub/irs-dft/i1040tt--dft.pdf

where did $8,676 come from? if you calculated that on your own, please share the calculations. If that is what you are getting in TT, please look at Schedule 3 and Schedule 5 - are there credits there that reflect the $120 difference

Re: Taxes Owed

BarbL — Thu, 07 Feb 2019 21:28:57 GMT

Do you have Qualified Dividends? That's generally what generates this question because Qualified Dividends are taxed at a lower rate than regular income.

Re: Taxes Owed

DaveL — Thu, 07 Feb 2019 23:53:18 GMT

Yes, the 8676 is from TT. I do have qualified dividends and I also have long and short term capital gains. Schedule 3 & schedule 5 are OK with respect to credits. I am thinking that the answer is in the dividends and capital gains though I didn't know that qualified dividends had a different rate like ST Cap gains. That would make sense if different rates were applied and explain the number on the TT form. I will attempt to break those off of the Taxable Income number and apply the appropriate rates and see what happens.

Thanks everyone!

Re: Taxes Owed

NCperson — Fri, 08 Feb 2019 00:33:00 GMT

in Forms View (not sure if this is in the online version, but certainly in the Desktop Deluxe),

pull up this form: "qualified dividends and Capital gains tax' - it will show the math on how the tax is calculated.

Form 1040, Line 3a is 15% while 3b MINUS 3A is based on the tax table

Schedule 1 Line 13 is also at 15%

On the schedule I referenced, you'll see that your qualified dividends and cap gains are subtracted from your taxable income on lines 2 and 3 and then it's taxed @ 15% on line 20 while everything else is taxed based on the tax table.... it's a lot of math, but that is the end result.

Re: Taxes Owed

NCperson — Fri, 08 Feb 2019 00:38:20 GMT

sorry - one more thing:

<<I didn't know that qualified dividends had a different rate like ST Cap gains>>

Short term capital gains doesn't have a different rate - it's based on the tax table (as long as there are no deferred losses or no long term losses to report)

Re: Taxes Owed

DaveL — Fri, 08 Feb 2019 18:38:40 GMT

I found a "Qual Div/Gap Gn" worksheet in "Forms View" and went through the numbers on it and the correct amount 8676 was calculated. So, that was the issue. If I had noticed the worksheet earlier I would have know the answer to my own question but I never looked until all of you guys enlightened me.

Thanks everyone!

Re: Taxes Owed

BarbL — Fri, 08 Feb 2019 19:32:33 GMT

Always happy to help!