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If my income went from 60k to 90k, but I now owe double in taxes. How can that be?

 
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MonikaK1
Expert Alumni

If my income went from 60k to 90k, but I now owe double in taxes. How can that be?

There may be several reasons that your total Federal tax liability doesn't match the tax tables based on the increase in income.

 

A blended tax rate, also known as the effective tax rate, is derived from a number of factors. The effective tax rate for individuals is the average rate at which their earned income, such as wages, and unearned income, such as stock dividends, are taxed. If you received income from a variety of things like stocks and bonds, interest, dividends, or self-employment, they may all play a role in determining your blended tax rate. See this thread for another discussion of this issue.

 

For Federal income taxes, the tax rate brackets for 2024 are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. To see how the tax brackets apply to you for this year, and for a tool to determine your marginal (the highest part of your income) tax rate, see here.

 

Also, note that taxes are often calculated using a different method than the tax tables. For example, if you have capital gains, the tax on those is calculated at the capital gain rate for your income level. If you are self-employed, you may have self-employment taxes in addition to income taxes. If you had to pay back any Premium Tax Credit, that would be another explanation. 

 

Look at your credits and deductions. Some might have decreased because your income exceeded a threshold for that particular item.

 

See this help article for more information.

 

In TurboTax Online you can preview your return before filing to find out how your taxes were calculated. See here for details. In Desktop versions, you can go to Forms mode to see the forms TurboTax has prepared from your entries.

 

 

 

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