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Level 2
June 1, 2019
Solved

Tax calulation error?

  • June 1, 2019
  • 4 replies
  • 1 view

is there an issue with how TurboTax calculates taxes on Line 11a on the 1040 form.  My turbotax says I owe $75,065 based on income on line 10 of $350,424.  If you go and do it manually from the IRS 2018 Tax Computation worksheet, the math says it should be taxed at $75,515  (difference of $450)   which one is correct?  

Best answer by

If it appears that there is  a difference between the tax due in the program and the calculation of a higher amount from the IRS tables, the difference is likely due to Capital Gains income or Qualified Dividends in your return.  Both those income sources can be taxed at much lower rates than the ordinary income from the tax tables.

4 replies

June 1, 2019
Did you have capital gains or qualifying dividends?
pgtt6817Author
Level 2
June 1, 2019
qualifying dividends.   that must have been the difference.  thanks
pgtt6817Author
Level 2
June 1, 2019
I just checked it using a 15% for the qualifying dividends part and turbotax is correct.
Answer
June 1, 2019

If it appears that there is  a difference between the tax due in the program and the calculation of a higher amount from the IRS tables, the difference is likely due to Capital Gains income or Qualified Dividends in your return.  Both those income sources can be taxed at much lower rates than the ordinary income from the tax tables.