How does Turbo Tax calculate 1040 line 16 tax? I am reviewing forms before filing. 1040 line 16 does not match IRS tax tables, why?

[graceric]

Married filing jointly.  I am self employed.

[DoninGA · Accepted solution]

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@graceric wrote:
Married filing jointly.  I am self employed.

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To the left of Line 16 there should be an indication of what was used to calculate the taxes.

In most cases if you have Qualified Dividends or Capital Gains reported the taxes are calculated using the Qualified Dividends and Capital Gains Worksheet.  But it could also be from Schedule D worksheet or other worksheet or Form indicated to the left of Line 16.

[graceric]

Thank you!

[jjlhampton]

I do not understanding.  Filing married jointly.  One W2, One 1099Misc.  One 1099Gov. Standard deduction plus withholding taxes.  Netting $60,700.  Tax tables says $6886 taxes due (pp10). Why does Turbotax say $9045?

[VolvoGirl]

Are you comparing the tax on line 16?  Or the total tax on line 24?  There may be other taxes and penalties.   What did you get a 1099Misc for?  You might owe self employment tax on it.

[DoninGA]

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@jjlhampton wrote:

I do not understanding.  Filing married jointly.  One W2, One 1099Misc.  One 1099Gov. Standard deduction plus withholding taxes.  Netting $60,700.  Tax tables says $6886 taxes due (pp10). Why does Turbotax say $9045?

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Are you looking at the 2020 Form 1040 for taxable income on Line 15?  If so, the tax on the taxable income will be on Line 16.

Or are you referring to your total tax on Line 24?  If so, this will also include taxes from Schedule 2 Line 3 and Other taxes to include Self-employment taxes from Schedule 2 Line 10.  

[jjlhampton]

I will do the comparison of 16 & 24 lines. The 1099-misc was issued for contractor payments.  Where are the taxes for self employment added in?

[DoninGA]

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@jjlhampton wrote:

I will do the comparison of 16 & 24 lines. The 1099-misc was issued for contractor payments.  Where are the taxes for self employment added in?

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SE taxes are on Schedule 2 Part II Line 4.  The total from Schedule 2 Part II flows to Form 1040 Line 23b 

[VolvoGirl]

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit (If it is greater than $400).  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  

SE tax is on the 1040 Schedule 2 line 4 which goes to 1040 line 23.

[Tonigjco]

Check the Qualified Dividends and Capital Gains Worksheet, lines 23-25 to see if that resolves your issue.

[Morrisecat]

I too am having trouble finding where TurboTax came up with the amount on 1040 Line 16 Tax.  Shouldn't I see that same number on my Schedule D or one of the other forms I have printed prior to filing?  I would like to see how it's calculated.  It differs from the calculations I've made.  

[DianeW777]

Yes.  If you have capital gain income (qualified dividends or sales on Schedule D) then you should see either the Qualified Dividends and Capital Gains Tax Worksheet (page 36) or the Schedule D Tax Worksheet in your file to show the tax liability calculation. It will not match the tax tables in this situation because the tax is calculated at a lower amount when capital gains are part of the tax return.

The links will provide the actual worksheets from the IRS and you will have one of these worksheets in your tax file.

@Morrisecat

[Morrisecat]

Thank you for your quick response.  I have printed the documents.  I have a Schedule D, but I do not have a worksheet.  How do I get it?   Thank you.

[MichelleLO]

Which version of TurboTax are you using?

@Morrisecat

[Morrisecat]

TurboTax Online Premier.