The amount of federal tax Turbo Tax calculates is way below the 22% based on 2022 tax tables from Circular E tax guide. Ive quadruple checked the entries and they are correct but the tax calculated is close to 12%. I am not comfortable with this but have no idea how to confirm?!?
You need to keep in mind that the federal tax rates are graduated, which means that if you are in a marginal 22% bracket, much of your income is actually taxed at 10 to 12%. For instance, for married filing joint the first $83,549 of your income is taxed at a combination of 10 to 12%. For a single filer, the first $41,774 of income is taxed at 12% or under.
It depends on what kind of income you have. There are like 7 different ways to figure the tax.
See the IRS worksheet on 1040 page 36 for how the tax is figured. Turbo Tax uses the same worksheet.
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
If you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from schedule D. The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet. It does not get filed with your return.
In the online version you need to save your return as a pdf file and include all worksheets to see it.
For the Desktop version you can switch to Forms Mode and open the worksheet to see it. Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.
You can probably tell because the tax on 1040 will be less than the Tax Table
You need to keep in mind that the federal tax rates are graduated, which means that if you are in a marginal 22% bracket, much of your income is actually taxed at 10 to 12%. For instance, for married filing joint the first $83,549 of your income is taxed at a combination of 10 to 12%. For a single filer, the first $41,774 of income is taxed at 12% or under.