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New Member
posted Jun 1, 2019 10:56:43 AM

I entered $90 from my 1099INT and my Fed tax went up $82. Why so much?

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2 Replies
Level 15
Jun 1, 2019 10:56:44 AM

Are you sure you didn't enter $900 by mistake?

Level 15
Jun 1, 2019 10:56:46 AM

When you enter one taxable transaction, you can't just watch the monitor.  You increased your overall adjusted gross income and with that come many other changes in your return, not just the incremental tax on the one transaction.

Like for example it increased your AGI and that would decrease some deductions if you itemized on Schedule A.  And by increasing your AGI it might reduce some credits you were getting like EIC.  And can make more of any Social Security taxable.

I once added $6 in interest and the tax went up $12! It pushed me into the next tax bracket. I was right at the line.