Error in adding bank interest income?

Forum|Forum|5 years ago
January 27, 2021
1 reply
16 views

After entering all my data except bank interest, I owed $416 for 2020. When I add in $6 interest from my bank my tax owed jumps to $423, more increase than the amount entered. If I change the amount to $1 or $2 the owed amount drops to the original $416 and then increased to $417 if I enter $3 interest. The amount stays at $417 if I enter either $4 or $5 but then jumps to $423 for the next dollar increment change to $6. Seems to be a flaw in the calculation somewhere. How can I trust the total amount owed?

Best answer by ErnieS0

Having your tax liability jump by $7 after adding $6 may not look right but it probably is.

TurboTax is backed by a 100% Accurate Calculation Guarantee. In plain English, if you pay an IRS or state penalty or interest because of a TurboTax calculation error, we'll pay you the penalty and interest.

There are a number of reasons why your tax may have gone up.

Your income may have put up into another tax line. The IRS tax tables are divided in $50 rows. For example, if you were single and cross the line and make $50,001 instead of $50,000 your tax would go up $11 for just adding a dollar.
Extra income may also reduce some tax credits, such as the Earned Income Tax Credit.
Extra income may also may more Social Security benefits taxable.

You can schedule an Expert Review with a tax return to review your taxes before you file. To schedule a Live Review see What is a talk live session and how can I schedule one?

ErnieS0Answer

Level 15

Having your tax liability jump by $7 after adding $6 may not look right but it probably is.

There are a number of reasons why your tax may have gone up.

Your income may have put up into another tax line. The IRS tax tables are divided in $50 rows. For example, if you were single and cross the line and make $50,001 instead of $50,000 your tax would go up $11 for just adding a dollar.
Extra income may also reduce some tax credits, such as the Earned Income Tax Credit.
Extra income may also may more Social Security benefits taxable.

You can schedule an Expert Review with a tax return to review your taxes before you file. To schedule a Live Review see What is a talk live session and how can I schedule one?

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