I entered several Income numbers on a W2 to compare TurboTax output to Smart Asset and an excel function I wrote. Smart Asset and my numbers always match, but TurboTax is off by some number of dollars.
Does anyone know why? I did a similar test last year and recall getting similar deviations. Didn't follow-up at that time.
One of the numbers is correct, the last one. It is a different tax rate though.
| Income | Deduction | Turbo Tax | SmartAsset | My number |
| 89250 | 27700 | 6949 | 6946 | 6946 |
| 100000 | 27700 | 8239 | 8236 | 8236 |
| 120000 | 27700 | 10927 | 10921 | 10921 |
| 114450 | 27700 | 9973 | 9970 | 9970 |
| 114500 | 27700 | 9979 | 9976 | 9976 |
| 520000 | 27700 | 116094 | 116094 | 116094 |
Thanks,
Greg
TurboTax's numbers are correct because for taxable amounts up to $100,000 one is required to use the Tax Table which produces taxable amounts based on $50 increments of income in the ranges that you are testing (except for $520,000 where you actually see agreement) and the tax is based on the midpoint of the step. If you add $25 to each of your income amounts you should see agreement. In other words, where there is disagreement the error is in both your spreadsheet result and in the result from SmartAsset.
Also, in your spreadsheet, use TRUNC((income-deduction)/50,0)*50+25 in place of income minus deduction when income minus deduction is $100,000 or less. (This won't be quite right at lower taxable income amounts where the table uses $25 income steps.)
Rounding issues, maybe. Intuit works to ensure the accuracy of the calculations on every form prepared using the Services. The TurboTax Accurate Calculation Guarantee is for the lifetime of your 2023 individual tax return, which Intuit defines as seven (7) years from the date you filed it using TurboTax Online.
A rounding error of $1 may be acceptable, but these are in the range of $3-6. Turbo Tax tax calculation is yielding a higher amount of tax people owe. I would think you would want to investigate a bit. Here is yet a 3rd example of calculations which are the same as Smart Asset and my other formula. These are done purely in Excel.
| Income | 89250 | 100000 | 120000 | 114450 | 114500 | 520000 | ||
| Deduction | 27700 | 27700 | 27700 | 27700 | 27700 | 27700 | ||
| Married Filing Jointly | Taxable Income | 61550 | 72300 | 92300 | 86750 | 86800 | 492300 | |
| 22000 | 10% | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 89450 | 12% | 2200 | 6946 | 8236 | 0 | 9970 | 9976 | 0 |
| 190750 | 22% | 10294 | 0 | 0 | 10921 | 0 | 0 | 0 |
| 364200 | 24% | 32580 | 0 | 0 | 0 | 0 | 0 | 0 |
| 462500 | 32% | 74208 | 0 | 0 | 0 | 0 | 0 | 0 |
| 693750 | 35% | 105664 | 0 | 0 | 0 | 0 | 0 | 116094 |
| 37% | 186601.5 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Tax Total | 6946 | 8236 | 10921 | 9970 | 9976 | 116094 | ||
| Turbo Tax Tax Total | 6949 | 8239 | 10927 | 9973 | 9979 | 116094 | ||
| Turbo Tax Over Tax Calc | $ 3.00 | $ 3.00 | $ 6.00 | $ 3.00 | $ 3.00 | $ - |
Thanks for having someone check the Turbo Tax Algorithm which appears to be off in certain Tax percentages.
Happy to send the Excel to someone who will look into it.
TurboTax's numbers are correct because for taxable amounts up to $100,000 one is required to use the Tax Table which produces taxable amounts based on $50 increments of income in the ranges that you are testing (except for $520,000 where you actually see agreement) and the tax is based on the midpoint of the step. If you add $25 to each of your income amounts you should see agreement. In other words, where there is disagreement the error is in both your spreadsheet result and in the result from SmartAsset.
Also, in your spreadsheet, use TRUNC((income-deduction)/50,0)*50+25 in place of income minus deduction when income minus deduction is $100,000 or less. (This won't be quite right at lower taxable income amounts where the table uses $25 income steps.)