Incorrect Tax Liability

[lyakobson]

Wondering why TurboTax is saying my tax liability is $6 lower than what the IRS tax table shows.  I have seen posts regarding other income like dividends, capital gains, etc. but I filled out a 1040 myself and compared it with the numbers that TurboTax returned.  All of numbers match (meaning every line I have on my 1040 equal exactly the amount from TurboTax).  How can the tax liability be different if both my 1040 and TurboTax numbers say your taxable income is A, and IRS says A = 6 more than TurboTax enters as total tax?

[SusanY1]

What you describe still sounds like there are capital gains rates, qualified dividends or some other type of tax at play in the background.  

When these types of income are part of the "taxable income" amount on Line 15 then the tax (Line 16) doesn't come from the tax table.  

 

[mesquitebean]

@lyakobson 

In your original post you didn't outright say if you have any dividends and qualified dividends, capital gains distributions, or not.  You only mention looking at the Form 1040 itself.   TurboTax does not always use just the IRS Tax Tables, depending on what is in your return.

If using Online TurboTax, here's how to see the method that TurboTax used to figure your tax:

Open your return interview.

Go to left column menu and choose Tax Tools, then Tools.

In the Tools window choose View Tax Summary.

On the Tax Summary Screen over in the left column menu choose "Preview My 1040".

On the 1040 that displays, scroll down to Lines 15 and 16.

Between Line 15 and 16 is a "Tax Smart Worksheet" which should show the method that TurboTax used to figure your tax.

What method is shown there?  Did it use the "Qualified Dividends and Capital Gain Tax Worksheet?"

[lyakobson]

Sorry, I do have qualified dividends and capital gains/losses.  

I don't see where 'return interview' is.

Thank you.

[mesquitebean]

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@lyakobson wrote:

Sorry, I do have qualified dividends and capital gains/losses.  

I don't see where 'return interview' is.

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Then TurboTax would have figured your tax on the Qualified Dividends and Capital Gains Tax Worksheet, which normally results in lower tax than the Tax Tables.

You said:  "I don't see where 'return interview' is."

Did you use Online TurboTax or desktop software?    The return interview is simply the screens you went through to enter your information where it interviewed you about each topic.    So if you are using Online TurboTax, when you open up the interview like you are going back to work on your return, then you should be able to follow the steps I outlined above.

If you used Online TurboTax, have you already finished or filed and the interview is now closed, and you don't know how to open it back up?   If so, we can tell you how to open it back up.  

If you're using desktop software, the steps I mentioned above won't apply.  If you are using desktop software, I can tell you another way to look at the Tax Smart Worksheet to see the computation method, and even the QDCGT Worksheet itself.