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Level 2

# Turbo Tax Basic Tax Rate Calculation Check

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

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Level 15

## Turbo Tax Basic Tax Rate Calculation Check

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.)

5 Replies
Level 2

## Turbo Tax Basic Tax Rate Calculation Check

The numbers were all for Married Filing Jointly.  Tx

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## Turbo Tax Basic Tax Rate Calculation Check

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.

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Level 2

## Turbo Tax Basic Tax Rate Calculation Check

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.

Level 15

## Turbo Tax Basic Tax Rate Calculation Check

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.)

Level 2