My calculated tax from turbo tax doesn't match the tax table tax.

[rousebr]

I'm filing single, and have no weird tax situations.  Income, some interest, some dividends, one capital gain.  that said, my calculated tax from turbo tax says 17334, and it does not match the tax table amount, which is 17353.  In fact, 17334 is not even in the tax table.  How is it calculated?

[BMcCalpin · Accepted solution]

You have capital gains or qualified dividends.

While these two categories are added into Adjusted Gross Income and thus show up on line 8b of the 1040, they cause the tax computation to change, because ordinary income is taxed at one rate, and capital gains and qualified dividends are taxed at a lower rate.

The result is that when you have capital gains and/or qualified dividends, then the tax on line 12a is somewhat lower than it would have been in the tax tables.

Look for a Qualified Dividends and Capital Gains Tax Worksheet (Qual Div/Cap Gn) in your output forms which should explain how the tax was computed.

[Edited 3/20/2020 2:17 pm CDT - updated for 2019]

[chashlow]

On Worksheet, why does TT and the IRS subtract $40000, or 80000, or 53600 from line 1 (taxable income) before calculating tax?  Thanks.

[droodhall]

I have a similar tax return for 2020, nothing out of the ordinary.  My taxable income on turbo tax is 64,671.  Turbo tax gives a total tax of 6,694.  But the tax from the IRS tax table is 7,366.  How does Turbo tax drive the tax?

[justinpj62]

I had the same question. But I  still don't understand. My 104o tells me the taxable income and is much lower that the tax rates. Not complaining! Thanks turbot tax. Without I would be lost!

[AamilD]

@justinpj62 , this is because Capital gains and qualified dividends are taxed at a lower rate then ordinary income ( For eg from salary from a job). When you refer to the tax table/tax rates, those do not take into consideration the lower tax rates on Capital Gains/Qualified Dividends and hence the mismatch. However, TurboTax will take that into account and will accurately find out your tax rate.

[dlrmmr]

Where can the calculations be printed so that when the IRS says that their calculation is the right one, i have something to prove how the total tax was arrived at and is correct?

Without any proof, they just ask you to send them a check...

[DoninGA]

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@dlrmmr wrote:

Where can the calculations be printed so that when the IRS says that their calculation is the right one, i have something to prove how the total tax was arrived at and is correct?

Without any proof, they just ask you to send them a check...

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It will be on the Qualified Dividends and Capital Gains Tax Worksheet that is included in the PDF of your completed tax return.

[Johnsto1]

How can I see the method used to calculate my tax on 1040-SR Line 15  I had Qualified Distributions including a loss, RMD QCD IRA Conversion to Roth, income and pension.  I used the Qualified Dividends ... worksheet and came up with a different amount than Turbotax.

[BrittanyS]

You can view your return in TurboTax online by following these steps:

1. Click Tax Tools on the left-side panel
2. Click Tools
3. Click View Tax Summary
4. Scroll up on the left-side panel to preview my 1040

To view in TurboTax Desktop:

1. Click Forms in the right-hand corner
2. Scroll through the list of forms to the Qualified Dividends worksheet to view calculations

@Johnsto1 

[Johnsto1]

There was no Qualified Dividends and Capital Gains Tax Worksheet in my PDF of my Turbotax return.  How can I get it.

[CarissaM]

This would be best handled by clicking here to contact us by phone. @Johnsto1