Why is turbo tax calculating an incorrect tax amount on my return?

[aptcbcbs20]

Taxable income is $13,335.  MFJ should equal  atax of $1,333 for taht amount.  TT is saying $1,318.  How does this happen?

[JillS56]

Please clarify why do you think it should be $1,333?   How are you coming up with that number?

[rjs]

You appear to have used the tax table to calculate the tax. The tax table is only one of seven different methods that can be  used to calculate your tax, depending on what is in your tax return. Your tax return must require one of the other methods. The most common reason that you cannot use the tax table is that your income includes qualified dividends or long-term capital gains, which are taxed at lower rates.

In the IRS Instructions for Form 1040, look at the instructions for line 16. Starting at the bottom of the right column on page 32 it explains the seven methods that can be used to calculate the tax on line 16.

[aptcbcbs20]

I think that's it.  These numbers were so small I forgot about them.  That would probably explain the difference in tax calc.  Well done and thanks!

[Mike9241]

did you have qualifying dividends or long-term capital gains?  while they are included in taxable income, they may be taxed at 0% rather than the tax bracket rate. There can be other reasons. we cant see your return.

[aptcbcbs20]

Thanks to all.  It was a small cap gains number that I overlooked in the total tax calculation.  The replies were immediately helpful and spot on.  Well done and thanks!

[john989]

Turbotax is grossly wrong in calculating my federal tax!   I have been having long term capital gains in past 20 years, but only until 2021, IRS sent me a letter to point out the wrong tax calculations by TurboTax and refunded me a big check. For all those years, nearly 3 decades, I had been so relying on TurboTax, and I might had lost a lot of money by using TurboTax for all those cases where I had long term capital gains. I bet that million users probably have lost tons of money by using TurboTax software. Intuit, please fix your buggy software!

I bet that sooner or later there will be a class action lawsuit against Intuit for the aforementioned matter.

Thanks for your attention!

[Mike9241]

we can't see your return or the IRS letter so don't know what the issue is.  kind of doubtful that Turbotax has been wrong for 20 years and no one has caught it. also, the tax laws have changed substantially over the past 20 years.   that refund you got was for a specific year. after 3 years any errors resulting in tax overpayment would have been forfeited under the tax laws, 

[jcarpino09]

I am having a problem with a capital gain calculation.  It appears that the long term capital gain on schedule D Form 8949 is calculating the tax amount at 21% instead of 15%.    I upgraded to Premier at the advice of the "advisor" and it didn't solve the problem.    My income is nowhere near the 553,850 maximum for 15% LTG, so why is TurboTax calculating 21%?

[DawnC]

Make sure you are looking at the correct worksheet.  If you look on the 1040/1040-SR Worksheet (Wks), you see your taxable income on Line 15.  Right below that, you should see the Tax Smart Worksheet that shows what worksheet was used to calculate the amount on Line A.    In my example below, there is an X on the Schedule D Tax Worksheet line, so I would need to look at that worksheet (Schedule D Tax)  to see the details of the calculation.  

An X on the first line (1-Tax table) implies no capital gains tax.  In that case, your tax was found in the IRS tax table for your filing status and taxable income on Line 15.   If you have any other lines with an X, the referenced worksheet or schedule will be included with your return.    Which line item has the X on the Tax Smart Worksheet?  @jcarpino09  -  that is the worksheet you need to look at to see how your total tax was calculated.     Example below.

[jcarpino09]

I must be doing something wrong because checkbox 4 for qualified dividends and capital gains worksheet is being checked instead of box 3.   I am trying to report the sale of inherited real estate (home)

[rjs]

@jcarpino09  Why do you think that using the Qualified Dividends and Capital Gain Tax Worksheet is wrong? Selling an inherited home would produce a long-term capital gain or loss. (A sale of inherited property is always considered long-term, no matter how long you or the deceased actually owned it.) Look at the conditions for determining which method to use to calculate the tax in the IRS Instructions for Form 1040. It's in the instructions for line 16, starting in the right column on page 33.

[JamesG1]

“I must be doing something wrong…”  Not necessarily.  

The instructions for use of the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet are quite involved.

The instructions for the use of one worksheet or the other are found at the top of the Schedule D Tax Worksheet.  You may find that form here on pages D-16 and D-17.

The Qualified Dividends and Capital Gain Tax Worksheet may be found here on page 37.

If this does not completely answer your question, please contact us again.

@jcarpino09 

[abholcomb]

I have a similar problem. We are married filing jointly. I have income from my contracting business that is a partnership LLC, and my K-1 is $62,000. My wife has about $6500 W-2 income. Our taxable income is $28000. We own our home and I have a home office yet TT states that we have $10,000 owed taxes. How is this even possible? I feel like I'm being penalized for being a small business owner.

[BillM223]

Obvious, something big is being overlooked.

What are the amounts on lines, 9, 11, 15, 16, and 24 on your 1040?