Effective tax rate for 2016

[needhi_sheth]

where can i find the summary of my 2016 taxes and effective tax rate?

[KenH1 · Accepted solution]

To preview your 1040 tax return:

• Click My Account (Top right of your  screen)

• Tools

• View Tax Summary

• Once your Tax Summary loads, click on Preview my 1040

On a form 1040, to get an estimate of your effective tax rate, divide line 63, total tax by line 37, adjusted gross income.

[connor-gants]

I would say that TurboTax could make its cover letter more clear about this.  The effective tax rate in my TurboTax cover letter was "wrong" when I did the same calculation.  I realized that the "effective tax rate" it was calculating excluded Other Taxes from line 62; it was based on line 56 only.  That sort of makes sense -- my "Other Taxes" was additional payroll taxes, so unless it was going to add in withheld Medicare/SS taxes, to keep it apples-to-apples it makes sense to use "Effective [Income] Tax Rate."  But the income-only tax amount is not shown on the cover letter.  So from the numbers available to you there, it looks like TurboTax just botched the arithmetic.

[rcj007]

TurboTax (wrongly) determines Federal effective tax rate by dividing (total tax minus OTHER TAXES [SE tax, etc.]) by AGI. My calculations confirm that its math is accurate but its method is incorrect – if they mean to limit it to Effective INCOME Tax Rate without considering other Federal taxes on income, it should be (total tax minus OTHER TAXES [SE tax, etc.]) divided by TAXABLE INCOME. Income that is not taxable is by definition not subject to income tax and therefore not part of the calculation.

A married filing joint 2016 tax return having taxable income of $153,587 with total tax (excluding other taxes [SE, etc.] of $29,990 has an ‘Effective Tax Rate’ of 19.5% (20.65% if I include other taxes, in this case SE tax). TurboTax reports an ‘Effective Tax Rate’ of 14.61% – A CONSIDERABLE UNDERSTATEMENT!

Although I believe its method wrong, at the very least, it should define what it means by ‘effective tax rate’ and explain its methodology. One might think TurboTax is a department of the U.S. Government trying to have taxpayers think the impact of Federal taxes on their income is less than it is.