Does TurboTax ever make errors in computing federal taxes? I agree on taxable income but if I use the IRS worksheet, I get a higher tax owed than generated by TurboTax.

[lcassedy]

Filing Single, taxable income = $143,498
Calculated myself, tax = $28,275
Per TurboTax, tax = $28,033

[rjs]

It's extremely rare for TurboTax to make a mistake in the tax calculation. On the very rare occasions that it does make a mistake, it's not on common types of income. It's on some unusual and obscure situation.

You didn't say what "IRS Worksheet" you used to calculate the tax. There are seven different methods that can be used to calculate your tax, depending on what is in your tax return. The most common reason that your tax would be less than you calculate is that your income includes qualified dividends or long-term capital gains, which are taxed at lower rates.

In the IRS Instructions for Form 1040, look at the instructions for line 16. Starting at the bottom of the middle column on page 33 it explains the conditions for determining which of the 7 methods to use to calculate the tax.

[Mike9241 · Accepted solution]

there are multiple ways in which your income taxes can be computed. I'll bet you used the tax rate schedule method. if you had net long-term capital gains and/or qualified dividends, that won't give you the right tax. refer to page 36 in IRS 1040 instructions. 

a shortcut that may work

1) amount from line 3a on the 1040

2a) if schedule D was filed the smaller of lines 15 or 16 but not less than zero

2b) if no schedule D was filed the amount from line 7 on the1040. if blank use zero

3) add 1 and either 2a or 2b whichever was used 

4) from your taxable income subtract 3) and figure the tax on this using the tax rate schedule

5) multiply 3 by 15%

6) add results of 4)+5)

[lcassedy]

Thank you so much! This was my first year getting a 1099-DIV statement and I didn't read far enough into the instructions for how to calculate my taxes. I needed to fill out the Qualified Dividends and Capital Gain Tax Worksheet.