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The tax calculation on my tax return appears to be incorrect. Is there an issue with Turbo Taxes' tax calculations on federal returns?

When I manually calculate the tax it is $6 higher than what Turbo Tax calculated.  If I use the tax tables it is $8 higher than what Turbo Tax calculated.  Is there a problem with Turbo Tax's calculations for federal tax?
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2 Replies

The tax calculation on my tax return appears to be incorrect. Is there an issue with Turbo Taxes' tax calculations on federal returns?

Qualified dividends, and LT Capital gains may add into your AGI and Taxable income.

....BUT...those types of $$ are pulled out separately and taxed at a lower rate using one of a couple special tax calculation forms.....so the TTX calculated tax is usually, and properly lower than what the tax table shows when one has those types of income included on their tax return.

 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
AnnetteB6
Expert Alumni

The tax calculation on my tax return appears to be incorrect. Is there an issue with Turbo Taxes' tax calculations on federal returns?

No, there should not be a problem with TurboTax's calculations for Federal income tax.  

 

Since TurboTax is calculating your tax amount lower than the tax tables, your income tax is most likely being calculated on the Qualified Dividends and Capital Gains Worksheet.  When this worksheet is used to calculate income tax, your income is broken down into certain categories.  Long-term capital gains and qualified dividends are separated from other income and taxed at lower rates.

 

Going through that worksheet one line at a time would show how the total tax was calculated.

 

If you are using one of the CD/downloaded versions of TurboTax, you can find the worksheet by going to Forms Mode.  Click Forms in the upper right corner of the screen.  Then, look for Qual Div/Cap Gn in the list on the left side of the screen.

 

If you are using TurboTax Online, you will need to pay for your return and then print or preview the return to find the worksheet.

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