Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Mar 30, 2022 7:46:48 PM

Married filing joint 2020 taxable $197,269, owed $31,422. 2021 taxable $229,542, owe $42,419. $10,997 tax on a $32,273 increase in TI. That is 34% vs 24%. Why??

Both yrs taxable income are well within the 24% tax bracket, so any delta between them should be taxed at 24% or $7,745.52. What am I missing?

0 2 164
2 Replies
Expert Alumni
Mar 30, 2022 8:46:37 PM

If you have capital gains included in your income that could affect things, as they are typically taxed at 15%. So if you had more capital gains in 2020, your effective rate in 2021 would be higher.

 

If you have self-employment income, it is taxed more than ordinary income because of the self-employment tax. So if that component of your income changed, it would affect your rate.

 

Also, you my have credits, like child tax credits, that will reduce your tax and can vary from year to year.

 

I suggest you compare your tax returns from each year to see what changed. 

 

You can view your form 1040 while working in the online version of TurboTax by following these steps:

 

While working on your return in the Federal section of TurboTax:

 

   1.  Choose the Tax Tools icon on your left menu bar

   2.  Tools

   3.  View Tax Summary

   4.  Choose the Preview my 1040 on your left menu bar

 

 

 

 

Level 15
Mar 30, 2022 9:02:12 PM

we can't see your return. since you are not using the SE version, I doubt that SE tax is the cause. However, having less in the way of qualified dividends and long-term capital gains could be.  you need to compare  2020 with 2021 line by line to look for possible entry errors. with all ordinary income (no qual div or ltcg) your taxes would be about $43,100