TurboTax Deluxe 2025 running Federal Refund/Owed display and SSA Income

[powersj]

I look at the TurboTax Deluxe (2025) running Federal Refund / Owed display window on the top banner of the desktop version all the time while I'm making changes.  When I added my SSA benefit, the Federal Owed display window applied a 20% tax on the added income.  I'm in the 22% tax bracket (which adding in the SSA income does not change), but my effective tax rate is around 13%.  Is that normal? I did play with my income order and my impression was that whatever I added last usually resulted in a higher applied tax rate on that income.  

[rjs · Accepted solution]

Your Social Security benefits are never fully taxable. Only a percentage of the benefits is taxable, depending on your other income. At most 85% of your Social Security benefits is taxable. So no matter what bracket you are in, the effective tax rate will not be as high as the bracket percentage. On Form 1040, line 6a is your total Social Security benefits, and line 6b is the taxable amount. You can look at the Social Security Benefits Worksheet in forms mode to see how the taxable amount is calculated.

[powersj]

Thanks.  I understand what was happening now.  Yes I did not apply the rate to the reduced 85% from Line 6B Form 1040.  Secondly, the tax rate applied was always at the higher 22% rate because the SSA income was being entered last.