How do I fix the blended tax rate used by Turbotax which is clearly incorrect and gives me a much higher tax liability?

[Irene2805]

TurboTax does not use the blended rate to calculate your taxes.  The IRS specifies the method, depending on the type of income shown in your return.

To see the method used to calculate your taxes, go to the Federal 1040 and look at the Tax Smart Worksheet.   To view the Tax Smart Worksheet, please follow these steps:

TurboTax Online

1. While in your return, click Tax Tools > Tools  (in the black bar at the left of the screen).  
2. Under "Other helpful links" click on View Tax Summary.
3. Click on the Preview my 1040 link in the black bar.
4. Using the scroll bar at the side of the 1040 window, scroll to the Tax Smart Worksheet between lines 11 and 12. 
5. Line A will contain the amount of tax calculated, along with an X indicating the method used to calculated your tax.  
6. To go back to your return, click on the Back link in the black bar.

TurboTax Desktop

1. Go into Forms Mode by clicking on the Forms icon in the top right of the blue bar at the top of your screen.  
2. In the Forms in My Return list, click on 1040/1040SR Wks. 
3. Using the scroll bar at the side of the 1040 window, scroll to the Tax Smart Worksheet between on page 3.
4. Line A will contain the amount of tax calculated, along with an X indicating the method used to calculated your tax.  To view the worksheet, right-click on the number in line A and select Data Source from the menu that pops up.  

[mcombs1]

I have the same problem with my Federal return. The final page of my Federal Tax Review (when I click on the "Why do I owe $$$?" button) shows that I'm being taxed at a "blended tax rate" of 27.5%. When I do the calculations myself on our earnings ($140,000 filing jointly) using 2019 tax rates, I find that we owe 17,257.68. But TurboTax is saying that we owe $31,706.  You guys need to recheck your system.

[mcombs1]

And FWIW - I followed the instructions listed above - according to the Tax Smart Worksheet, we should owe $17,114 - NOT $31,000. What's UP?!! 

[VictoriaD75]

The IRS uses a progressive tax rate based on your filing status and income level. Different levels of income are taxed at different rates. Additionally, different types of income (such as dividends or capital gains) may have separate tax rates. The blended tax rate is not applied to your taxable income amount. 

Additional information may be found in the link below:

2019 Tax Rate Schedule

We cannot see your return in this forum. If you need additional assistance, you may want to contact TurboTax Support.

What is the TurboTax phone number

[britt508]

I went to the worksheet you suggested and that number is a little higher than normal but seems likely correct. That number is NOT what's showing up at the end. So how do I get someone to fix this? I've been using TurboTax for years, it's very unsettling to know that due to an error in your system, I could've been paying thousands more dollars than I should be... 

[chickenflag]

For us, it was because we filled out some of the info from my w-2 wrong, boxes 12 and 12b. Those boxes had letters in them that we should have used in filling out the form, we randomly picked other letters and it caused the problem.

[Anonymous]

you are saying the problems were caused by incorrect codes entered in box 12 of w-2. then  FIX THEM.  TT does not use a blended rate except in telling you what your taxes are in relation to taxable income.  TT will either use the tax tables or tax rate schedules depending on your income.  

[dsc1977]

I followed these instructions and under the other taxes line it added an addition $4900. It said that the additional  taxes were coming from line 10 which was calculated at zero. There is a flaw in your calculations. 

[Cynthiad66]

If the amount of $4,900.00 is incorrect, go in and remove it and put the correct amount.  The easiest way is to delete the transaction and start over and allow Turbotax to re-calculate the amounts for you.  Also, go back to your W-2 to verify the amounts in Box 12.

TurboTax does not use the blended rate to calculate your taxes.  The IRS specifies the method, depending on the type of income shown in your return.

To see the method used to calculate your taxes, go to the Federal 1040 and look at the Tax Smart Worksheet.   To view the Tax Smart Worksheet, please follow these steps:

TurboTax Online

1. While in your return, click Tax Tools > Tools  (in the black bar at the left of the screen).  
2. Under "Other helpful links" click on View Tax Summary.
3. Click on the Preview my 1040 link in the black bar.
4. Using the scroll bar at the side of the 1040 window, scroll to the Tax Smart Worksheet between lines 11 and 12. 
5. Line A will contain the amount of tax calculated, along with an X indicating the method used to calculated your tax.  
6. To go back to your return, click on the Back link in the black bar.

[Bill D]

The highest tax rate is 37%.  Turbo  tax tells me my blended tax rate is 57.9%!  So much for the guarantee of lowest possible taxes.

[Irene2805]

Your blended tax rate is the amount of tax you paid (or will pay) for the year, divided by your adjusted gross income (AGI).  This is simply "informational."  TurboTax does not use the blended rate to calculate your taxes.  The IRS specifies the method, depending on the type of income shown in your return.

To see the method used to calculate your taxes, go to the Federal 1040 and look at the Tax Smart Worksheet.   To view the Tax Smart Worksheet, please follow these steps:

TurboTax Online

1. While in your return, click Tax Tools > Tools  (in the black bar at the left of the screen).  
2. Under "Other helpful links" click on View Tax Summary.
3. Click on the Preview my 1040 link in the black bar.
4. Using the scroll bar at the side of the 1040 window, scroll to the Tax Smart Worksheet between lines 11 and 12. 
5. Line A will contain the amount of tax calculated, along with an X indicating the method used to calculated your tax.  
6. To go back to your return, click on the Back link in the black bar.

TurboTax Desktop

1. Go into Forms Mode by clicking on the Forms icon in the top right of the blue bar at the top of your screen.  
2. In the Forms in My Return list, click on 1040/1040SR Wks. 
3. Using the scroll bar at the side of the 1040 window, scroll to the Tax Smart Worksheet between on page 3.
4. Line A will contain the amount of tax calculated, along with an X indicating the method used to calculated your tax.  To view the worksheet, right-click on the number in line A and select Data Source from the menu that pops up.  

[jasonne78]

The Blended tax rate is more than my taxable income. How can that be possible.

[taxlady28]

It is an accounting term and simply confusing.  Try to ignore it and maybe they will take it away next year.  It is not your income tax rate.