Where does the Blended Tax Rate come from

[DaveF1006]

According to the IRS, "A corporation with a fiscal year that includes Jan. 1, 2018, will pay federal income tax using what is called a blended tax rate. Then calculate their tax using the new 21 percent rate. Proportion each tax amount based on the number of days in the taxable year when the different rates were in effect." Here is an IRS link that explains this concept.

if you are an individual, then you may be thinking about effective tax rate.  This is a tax rate that takes into account long-term capital gains and ordinary income. These are taxed at different tax rates and when you combine the two, the effective tax rate is the result., 

[pmount369]

Why would Turbo Tax have OVER 50% higher tax rate than the IRS or other tax sites? We use TT every year and for some reason our blended tax went from 14.8 to 34.7.  No self employment, and the income only increased by $1200. I called in and they said the IRS was giving that %, but that is not correct as I have gone to HandR Block and the rate was correct.  It has us paying out over $22,000 here.  Makes no sense. *EDIT* The TT calculator even has our rate as 22%. Is there a bug you're dealing with?

[cpharshbarger]

I'm dealing with the same issue.  I just called customer support to tell them I think it's a mistake and they sent my call to a certified CPA that I would have to pay $80 to speak with them.  I don't want a CPA I want the software people.  It's got to be a glitch!

[ColeenD3]

@ cpharshbarger

Where exactly in the program are you seeing the "blended tax rate"? Is this showing on a worksheet? Is the program actually calculating the tax at that percentage?

[mcombs1]

Did you ever have any luck with this? I went to calculate my taxes today and they show my husband and I owe twice as much money as last year - they put us at a 27.5% blended tax rate, when we should be closer to 15%.  I've found no way to contact them that doesn't involve MY paying more money to let them know of THEIR mistake. 

[DaveF1006]

At this point, it is impossible for us to look at your screen to find out how your tax return is being taxed. At this point you may wish to contact a specialist that can work through that section of the return with you. The specialists can look at your return on their screen to find out exactly what is causing this issue and suggest how you can take corrective action if needed. You should not be charged for the service if you are in a paid product of Turbo Tax.  

[pmount369]

So we did call and although the Intuit staff could see it was an obvious software glitch, they couldn't refer us without us having to get charged to a "tax professional".  We WERE a paid product user and it STILL wanted wanted MORE money for us to handle an obvious bug.  We filed another way and got back $500 vs owing $22,000.    HORRIBLE way for a company to handle this.  I have used Turbotax since ~1994.  Never again.  Lost a customer, as well as every other person I can get hold of. @DaveF1006 

[staaa]

I'm wondering this too.

Compared to looking up tax in the 2019 tax table, the number is widely different from what using this "blended tax rate" calculates.

[staaa]

@ColeenD3 

"Blended Tax Rate" shows up in Federal Tax Return review section with explainwhy^tm

[lmsmunchkin10]

This is crazy!  We're doing our taxes now & can't get a hold of anyone w/o having to pay for the tax help.  And if you guys were having this issue in February and the same issue is still here in April, they obviously don't care to fix the glitch.  Anyone else get this figured out in Turbo Tax, or did you all go to another software to file?

[mcombs1]

lmsmunchkin10 - For me it turned out to be an operator error. When I was filling out my W-2 information, I incorrectly coded the information in Box 12. Fingers crossed your problem is similar!

[lmsmunchkin10]

Thanks for your feedback.  I did go in and look at the form directly and it looks like the calculations are correct.  I think the breakdown of the total with the term blended tax rate is what made us flip.. when that's not the actual tax rate being used on the taxable income.  Wish they would fix it and show it better.  Crossing fingers it's fine, will have to let hubby look it over to verify.  Just sucks we possibly owe this year and we haven't in a few years.

[pmount369]

Went to a different company.  That’s how we knew it was a glitch.  3 other sites gave us a reasonable number.   Never using TurboTax again.  Never

[rnelle512]

In my case the program automatically calculated my blended rate and reported it to me upon "federal review". My tax rate was 41.3% on $59,000 taxable income, does not seem right to me