Incorrect calculated income tax 2024

[eduardosc]

When comparing calculated income tax I found discrepaciones on values calculated by TurboTax and manual calculations - also verified on other online tax calculation tools.

File Year: 2024

Filing Type: Married Join

Income: 254,498

Standard Deduction: 29,200

Turbotax calculated income tax: 40,474
Expected: 40,156 

There is a significant difference of over $300.

[xmasbaby0]

There is more than one tax table that is used for the calculations.   Did you have, for instance, any qualified dividends?

[eduardosc]

$4,740 of the total income comes from Saving account interest. is this income calculated differently that regular salary income?

[VolvoGirl · Accepted solution]

No.  Interest is taxed as ordinary income like wages.  But usually Turbo Tax calculates less tax than the tables depending on the kind of income.  How much is on 1040 line 15?

There are like 7 different ways to figure the tax.  See the IRS worksheet on 1040 page 36 for how the tax is figured.  Turbo Tax uses the same worksheet.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

Even though it shows up as income on the first page,if you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from schedule D.  The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet.  It does not get filed with your return.

In the online version you need to save your return as a pdf file and include all worksheets to see it.

For the Desktop version you can switch to Forms Mode and open the worksheet to see it.  Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.  And you will need to use this IRS worksheet on page 15.

https://www.irs.gov/pub/irs-pdf/i1040tt.pdf

[VolvoGirl]

Exactly where are you seeing the 40,474?   What line on the 1040?  What’s on line 16?  I came up with 40,156 too.  There may be some other tax assessed on line 23 from Schedule 2.

[eduardosc]

I'm using the online version and haven't file the returns. so I don't have the report yet. 

[eduardosc]

Thank you guys for yours responses. I'll look further following the notes.

[VolvoGirl]

I meant to post that.  Before filing,  You can preview the 1040 or print the whole return

https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...

[eduardosc]

Got it.
Total income: 254,498.
Taxable Income  225,298
Tentative tax: 40,157
Other Taxes: 317

this other tax is the value making the difference. not sure where it comes from

[VolvoGirl]

Look at Schedule 2.  I think there’s a way to see it without downloading the whole pdf.  Here is a blank one

https://www.irs.gov/pub/irs-pdf/f1040s2.pdf 

[eduardosc]

I noticed 146 is coming from Medicare. So apart from Income tax, medicare must be paid too on earned interests..

[SRJ65420]

I have a similar issue. Line 15 is $9700 and TT says $608 in taxes for a single 66 yr old TP. This is incorrect based on tables.  Help!!

Qualified and ordinary fivs are the same amount.  Thanks  

[SusanY1]

Since you have qualified dividends, your tax is not calculated using the tax tables.  You cannot rely on the information in those to determine the tax on your return.  Instead is is calculated using the dividend and capital gains worksheet.  The tax table provides a higher tax, because it isn't subtracting the qualified dividends from your "regular" taxable income and using the lower rate applicable to them. 

It seems you are likely in the tax bracket that allows long term capital gains and qualified dividends to be taxed at $0, so that amount is deducted from your taxable income.  

If your dividends are in the neighborhood of $3650-$3700, this explains the difference.  If they're nowhere close to that amount, let us know and we can troubleshoot further. 

@SRJ65420 

[VolvoGirl]

@SRJ65420   

Even though it shows up as income on the first page,if you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from schedule D.  The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet.  It does not get filed with your return.    See this FAQ

https://ttlc.intuit.com/community/forms/help/form-1040-line-11-amount-is-less-than-standard-irs-tax-...

In the online version you need to save your return as a pdf file and include all worksheets to see it.

For the Desktop version you can switch to Forms Mode and open the worksheet to see it.  Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.  

[SRJ65420]

Issue solve by the taxperts!!! Thank you