I calculated my 2018 taxes using TurboTax Deluxe 2018. Tax History Report: tax bracket 25% (NOT IRS 2018 tax bracket). A TTx CPA: TTx had wrong tax table. When is fix?

[Critter]

Estimates for the next tax year can be made by using the prior tax year DOWNLOADED program ... so if you had the 2017 download you could use it to complete all the What-If scenarios you please for the 2018 tax year ... I highly recommend you switch to the superior and cheaper product when you can upgrade your OS on your mac.

[ssmiley67]

Thanks for your quick response Critter#2.  

I have both the 2017 and the 2018 DOWNLOADED programs.  I was hoping to use the 2018 version for more accurate what-ifs, but that may not be completely possible before year end.

Also, could you elaborate on your comment "I highly recommend you switch to the superior and cheaper product when you can upgrade your OS on your mac."?  That one's going over my head...

[Critter]

Never mind the OS comment ... had a mind glitch for a second ... you are posting from the online version using an OS x  10.13 and I was thinking you needed at least 10.14  for the download but you only needed 10.12 so you are good.

I am glad you have the downloaded versions and know how to use the FORMS mode & the What-If option set to the 2018 choice ... that is going to be the best estimate you are going to get right not due to the flux the tax laws are in right not ... capital hill still talking changes by year's end ... will the madness ever stop?

[macuser_22]

@ssmiley67 - The developers know that the Tax History Report 2018 brackets are using 2017 information  and that is scheduled to be fixed in an upcoming update.

[dmertz]

Even when it's working as intended by the the developers, the Tax History display of Tax bracket % is pretty useless.  TurboTax's calculation of Tax bracket % assumes that all of your taxable income is taxable as ordinary income, even when it's not.  What you really want to know is marginal tax rate, something that TurboTax is incapable of providing except by the user adding various types of income and manually calculating the marginal tax rate as change in tax liability divided by change in income.  Manually calculating marginal tax rate will also account for changes in deductions, tax credits and the taxable amount of Social Security income that result from the change in a particular item of income, things that can have a multiplying effect on tax-bracket rate.

[ssmiley67]

Ughh.  Seriously?  TurboTax is not calculating marginal tax rate?  Do you mind if I ask how you know this to be the case?

[dmertz]

Explicit testing of this in 2017 and 2018 TurboTax.  It's easy to prepare a tax return where all of the income is long-term capital gains (enter only a Form 1099-DIV showing just capital gains distributions) and see that Tax History indicates the income falls in an ordinary income tax bracket.  Compare that to the Qualified Dividends and Capital Gain Tax Worksheet which correctly shows that none of the income is taxable as ordinary income.

[macuser_22]

I don't believe anything is "calculated" at all.   It simply looks up the taxable income form line 10 on the 1040 form and prints the bracket where that falls in the chart (look up table), which it appears is still the 2017 chart.

The tax history is based on taxable income before the actual tax is calculated which could be at a different rate.

As dmertz pointed out, the ** at the bottom say that the tax bracket is based on taxable income.  It is not adjusted  by the way that income is taxed.  You can just look it up yourself in the table which is all TurboTax does.

Rate Individuals Married Filing Jointly
10% Up to $9,525              Up to $19,050
12% $9,526 to $38,700      $19,051 to $77,400
 22% 38,701 to $82,500       $77,401 to $165,000
24% $82,501 to $157,500 $165,001 to $315,000
32% $157,501 to $200,000 $315,001 to $400,000
35% $200,001 to $500,000 $400,001 to $600,000
37% over $500,000        over $600,000