I am surprised to see TT calculated Fed tax is less than 50% of the amount that I manually calculated using my taxable income and IRS tax rate. How do I know if TT calculation is correct? What could cause such a big gap? Is there any place I should check? Thanks.
TurboTax does not always use the Tax Tables. There are several ways that the tax may have to be calculated, depending on the items in your return.
One of the most common reasons for this is if you have any qualified dividends or capital gains. In that case, TurboTax has to use the "Qualified Dividends and Capital Gain Tax Worksheet" to figure the tax. That would provide you a lower tax amount since qualified dividends and capital gains have a more favorable tax treatment.
You appear to be using the Home and Business Edition, which is a desktop product--at least that is what is shown by your screen name above. So you can go into Forms Mode and see if your tax was calculated on the Qualified Dividends and Capital Gains Tax Worksheet or another method.
TurboTax does not always use the Tax Tables. There are several ways that the tax may have to be calculated, depending on the items in your return.
One of the most common reasons for this is if you have any qualified dividends or capital gains. In that case, TurboTax has to use the "Qualified Dividends and Capital Gain Tax Worksheet" to figure the tax. That would provide you a lower tax amount since qualified dividends and capital gains have a more favorable tax treatment.
You appear to be using the Home and Business Edition, which is a desktop product--at least that is what is shown by your screen name above. So you can go into Forms Mode and see if your tax was calculated on the Qualified Dividends and Capital Gains Tax Worksheet or another method.
epo39b - you are correct. I found the answer. Thank you for such a clear explanation and easy to follow instructions.