Tax Calculation by Turbo vs. Tax Table calculation

[LindaSue4Taxes]

Completed our tax return on Turbo Tax.  For our return, the turbo tax calculation for taxable income matched the IRS tax table tax for the same taxable income.  However, in helping out a friend, the turbo tax calculation for $12,539 taxable income gave a tax calculation of $623 (effective tax rate of 2.34%) whereas, the IRS tax tables in the 1040 Instructions booklet for single, $12,539  taxable income shows a total tax of $1,306.  Why such a difference?

[SweetieJean]

Long term capital gains are taxed at a lower rate than that shown in the table.

[nu2tenn · Accepted solution]

First, if your friend has capital gains, as the person who previously responded mentioned, then there should be a schedule in the return which shows the calculation. 

If he does not have capital gains, the only thing that I can think of for this year was if your friend did not receive one of the stimulus checks (say the $600. one) he would be getting it as a credit on the return thereby lowering the tax.

If neither of those is applicable, carefully go over the return again, make sure all the elections and questions are answered correctly, and make sure all the balances are correct.  

Without seeing the return, it's hard to figure what else is causing the difference.

Good Luck.

[LindaSue4Taxes]

So, if the $600 stimulus was applied to tax due, where does that show up on a turbo tax prepared return?

[VolvoGirl]

For lower tax......

It depends on what kind of income you have, 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.

You can probably tell because the tax on 1040 will be less than the Tax Table

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

For Missing Stimulus payment, if you qualify for more it will be on 1040 line 30.

[nu2tenn]

If the stimulus amounts entered are correct, and one of the payments was not received, it should show up on line 30 of the 1040 - Rebate Recovery Credit.