Fed Tax Withheld on 1040 is much greater than total of withholding on W-2s

[wearigo]

Debugging an issue the IRS identified for me from 2018. I need to figure out whether TT made an error totaling federal tax withheld. TT itself seems to disagree internally, but there is probably some logic to this.

These are the relevant numbers:

1. W-2 withholding (Box 2) totals $19,091.79 – I totaled this by hand, and TT's own W-2 summary screen shows this amount.
2. TT-generated 1040 (p1 line 16) says $23,704

I'm at a loss as to why these two numbers aren't equal.

Does anyone out there have insight into how TT calculates total federal tax withheld for the 1040? 

Does TT include any other payments or withholding when calculating the second number? Or could I have checked a box wrong somewhere?

[VolvoGirl]

Yes.  As line 16 says it also comes from any1099 box 4 you entered.  Like 1099R, 1099G, 1099B etc.  and also from any SSA-1099 from Social Security.  

https://www.irs.gov/pub/irs-prior/f1040--2018.pdf 

[SteamTrain · Accepted solution]

IF that doesn't clarify the situation, you should look at the Federal Tax Payments Worksheet for your 2018 taxes, to see what's on that to see if the $23,704 value can be explained from some extra entry somewhere/some other form.  That worksheet breaks down all your (supposed) federal and state withholding entries by form type.

1) if you used the Online software for 2018, you log back into that same account and download a new PDF file of your 2018 tax return....the newly downloaded PDF file for 2018 will contain all the worksheets.

2) If you used the Desktop software for 2018, you would open that .tax2018 datafile again in the Desktop software, switch to Forms Mode, and look at the Tax Payments Worksheet directly.

[VolvoGirl]

Oh just thought of something else.  Do you have a lot if investments? If you have a lot of investments there is an extra Medicare tax which is offset with an extra amount on withholding.  Don't know the line #s for 2018 or remember when it started.

[wearigo]

I found the Tax Payments Worksheet, and it looks like TurboTax double-counted my estimated tax payments. These payments appear in the "Tax Payments Other Than Withholding" and then again in the "Taxes Withheld From:" section, line 18a, "Other Withholding."

I'm filing an Accuracy claim with TT. EDIT: not doing this after all.

Thank you for your quick replies, they were very helpful!

[VolvoGirl]

So you made estimated payments? Are they also on line 17 from Schedule 5? And you don't think you entered them twice?  Or maybe just in the wrong spot if they aren't on line 17? 

[wearigo]

They appear on Schedule 5 also, which fed them to line 17 as you suggest. Is that unrelated to the other page we've been talking about?

[SteamTrain]

Well, the difference between the proper withholding amounts is ~$4612.   IF that $ amount appears on line 17 of the form 1040, then I would suspect that you double entered that amount.

Though we may not yet have all the information needed.....the key here may be the entry you see on line 18a on the Tax Payments worksheet.   That value can only be entered by the user in an interview section for  "Withholding"...that is not entered elsewhere on some W-2 or 1099 type of form.   The line 18 value adds into all your other Federal "withholding" for line 16 of the form 1040.

BUT...Withholding is not the same thing as an Estimated tax payment. They are treated and enumerated as separate items.

 IF you accidentally entered any or all of your "Estimated" payments in that "withholding" part of the interview, and then also entered the same amount (properly) as one or more quarterly "Estimated" payments, then that is a double entry you may have accidentally made. 

The Estimated payments line (line 66 on the 2018 schedule 5) can also include a prior year refund...from 2017 taxes (the IRS also considers/enumerates that as an "estimated" tax payment) .  If you only have the line 66 entry on that schedule 5 then that same amount (total on line 75) feeds into line 17 of the 1040.

[wearigo]

Thanks to @VolvoGirl and @SteamTrain for your constructive skepticism. I followed your clues to find that I entered estimated taxes in two places – the correct place and also a form with a heading like "Other federal withholding." I've learned a lot here about how to check my work and also the risks of splitting the work with a spouse.

I might write a letter to the IRS asking if they'll waive the penalty (not the interest) – our first response to their letter was to think they made a mistake, and they initially wrote a letter accepting that explanation (and proof of estimated tax payments).

[VolvoGirl]

Glad you found it.