How is "Federal Tax You Owe" calculated in the Federal Review section? Is there a formula I can use to make sure it's correct?

[elro61]

This is my first time using Turbo Tax and I want to make sure I entered all of my numbers correctly.

[SteamTrain]

I don't know any easy way to do it yourself...unless you had pure W-2 and interest income, SS and 1099-R income......because different calculation methods are used based upon what types of income are involved.  

As soon as you start getting Dividends, or cap gains for for investments  (these are most common), or rental income, or 1099-MISC/contractor/SE income...then a whole bunch of extra calculations can be involved.

Easiest step it to print out just your form 1040, and look at all the income and deduction/credit lines on that form to see if they look reasonable.  Then TTX would likely have the right tax calculations.

An income line in lines 1-to-7 that seems to be waaayy off base, may indicate a mis-keyed or double entered income amount.

Line 16 shows a credit for what was supposedly withheld on your W-2 and various 1099-??? forms (usually 1099-R or SSA-1099) does that add up?

Other lines...depends on your situation, filing status, number of children and ages..

[elro61]

Thanks!

[elro61]

Hi, Steam Train. I have another quick (hopefully) question that you might be able to answer. I received a 1099-B for a $3 net gain (from Stash). Do I need to report something that small? That's the only 1099-B I received. Thanks!

[SteamTrain]

Yes you do.

IF you don't the IRS is  notified of the transaction thru electronic filings from the brokers too, and when their computers start doing detailed comparisons, they then tend to send letters to taxpayers  later assessing a tax on all of the proceeds, not just the gain.   So they expect you to report everything.  They get so much data early in the year, that the computers only do cursory comparisons of all the data sent in...the detailed examinations start later.

[fanfare]

Always print a copy of your completed tax return for your records, and review it carefully before e-Filing.

You will need it if you are audited by the IRS, or to amend because a TurboTax update changes your return.

If your data is accurate, Turbotax calculates the correct tax.