At the Federal Review stage, the "Blended Tax Rate" used to calculate the Tax Liability is much higher than expected. Where does this Blended Rate come from?

[Bsch4477]

Your blended tax rate is the amount of tax you paid (or will pay) for the year, divided by your adjusted gross income (AGI). 

[EhDee]

On the Fed Review screen, the Tax Liability is defined as:  [Taxable Income (x) Blended Tax Rate]=Tax Liability.  The value used for the Blended Tax Rate is significantly higher than the overall "composite" tax rate given the bracket that I am in.  It is also much higher than the "effective tax rates" that appear on prior years filings even though my situation is similar. There is no explanation how this Blended Rate is derived.  When I use the Taxable Income from my TurboTax information and use the Tax Formula (link below) the resulting Tax amount is much lower, and gives an effective tax rate comparable to prior years. https://ttlc.intuit.com/community/income/help/what-are-the-federal-tax-rates/00/27403

[Carl]

Let's say you have $100,000 of taxable income for 2019.

The first $9,700 is taxed at 10%. So you pay $970 on that.

The amount from $9,701 to $39,475 is taxed at 12%. So the tax on the additional $29.775 of income is $3,573. So far, total tax paid is $970 plus $3,573, or $4,543.

The amount for 39.476 to $84,200 is taxed at 22%. So the tax on that additional $44,725 is $9,840. So not the total taxes incured is $14,383.

The amount from $84,201 to $100,000 is taxed at 24%. So the additional $15,800 at 22% incurs $3,950 in taxes, bringing the total tax liability for $100,000 to $18,333.

So your total tax liability on $100,000 of taxable income is $18,333 which is 18.3%. Your "blended" tax rate is 18.3%

[EhDee]

Thanks for the reply. 

That is the issue that I am having.  When I follow the formula you outline for my Taxable Income, I end up with an effective tax rate of less than 21%.  However, the Blended Tax Rate used by TurboTax at that step is 26.0%.   It then uses that 26.0% to calculate the Tax Liability, which is much higher than expected.  How does TT arrive at that number (26.0%) for the Blended Tax Rate for their calculation?  It does not match up with the tax amount nor resulting effective tax rate per the IRS formula.