Total Tax Calculation Discrepancy

Forum|Forum|1 year ago
February 7, 2025
5 replies
58 views

Need help reconciling a $1 total tax difference between me and TT, if for no other reason than it is driving me crazy. Math seems straightforward. $70,181 taxable income. Married Filing Jointly. 10% bracket is $0 to $23,200, so $2,320 due. 12% bracket is $23,201 to $94,300, so remaining $46,981 ($70,181 - $23,200) is $5,637.72 due. Total tax then should be $7,958--$2,320 + $5,638 ($5,637.72 rounded). But, TT shows total tax as $7,957, $1 less. What am I missing? Does the IRS round down each tax bracket calculation versus following normal rounding rules? Is this a TT error? The numbers should be the numbers, so why the difference? Appreciate anyone who can clarify. Thank you.

rjs

Level 15

What you are missing is that for taxable income under $100,000 you cannot use the bracket percentages to calculate your tax. You have to use the Tax Table. The Tax Table works in small steps. In the Tax Table, for taxable income of $70,150 to $70,199, for married filing jointly, the tax is $7,967. TurboTax is following the IRS rules for calculating the tax.

CORRECTION: The tax in the Tax Table is $7,957, not $7,967.

The information in this reply is specific to the facts given in the question, and might not apply to other situations.

Ron-DAuthor

Level 2

Thanks, rjs. Had already looked at that, but in using the tax tables, TT is even farther off--$7,957 per the software versus your figure of $7,967. Mine was only a dollar off, and I think mine is right. I understand the argument, but I've used the bracket method for years always matching TT's figure exactly...until now. I'd love to hear from a TT tax pro on this one. Think the software is off.

rjs

Level 15

Sorry, I either misread the figure in the table or made a typo in my reply. The tax from the Tax Table is $7,957. TurboTax is correct. If you always matched the TurboTax result in the past, it was just chance.