Wrong tax amount on 1040

[cobalt300z]

Before I submitted my taxes I checked over my 1040 and noticed that the tax rate 12a is alot higher than it should be. 

My taxable income 11b is 35089

Turbo tax calculated 4206 for 12a

I'm calculating 3821 using the IRS 2019 tax schedule. 

I'm filing married jointly. 

I think there is a bug because it is calculated properly before I enter in my wife's foreign income. (she is fully excluded) 

I've tried customer support many times and they want my to pay to talk to a CPA. I'm not paying because your software is wrong. 

Any advice?

[KathrynG3]

It depends on several factors whether or not your wife's foreign earned income is fully excludable. 

The amount of foreign income included in the tax return will be posted to Schedule 1, line 9.

From the left menu>Federal>Wages & Income>Foreign Earned Income and Exclusion.

The series of questions that you answer could affect what is excluded. 

Questions include:

• what form or statement your foreign income was reported on
• whether the wages were paid by the U.S. government, including military wages, or earned in Cuba or other countries with U.S. travel restrictions
• When the income was earned and paid
• whether the employer provided goods such as living allowances for home, meals, transportation, or other
• where she lived-inside the U.S. or outside of the U.S.

• whether she is a U.S. Citizen or a Resident Alien

• If she met the bona fide residence or physical presence test

• if the country has a U.S. treaty
• if she paid foreign tax
• if she made any of the money while living in the United States
• if the earnings were more than the maximum foreign earned income exclusion of $105,900

When submitted, your return will include Form 2555. Please see the IRS Form 2555 Instructions for more details.

To see Form 2555 before submitting, go to the left menu>Tax Tools>Print Center and scroll the Form 2555. The name of the forms is always listed in the top left corner and bottom right corner of each page.

[cobalt300z]

Her income and housing was fully excluded. Fort 2555 was filled out correctly. 

What is incorrect is the tax rate that is being applied to my taxable income

[SusanY1]

Looking at the numbers that you have shared for taxable income and tax, it appears that you are looking at the tax rates and calculating the tax for your income on a standalone basis. 

When using the Foreign Earned Income Exclusion, the tax rate used is the rate that would apply before your wife's income is excluded, applied only to the taxable income.

See "figuring the tax on income not excluded" from instructions for Form 2555 found here: Form 2555 Instructions.

[watkinsjohn]

Last year, I filed and got a letter from the IRS 5 months later that I owed a penalty and more money because Turbo Tax did not calculate properly.  They showed me how to use the tax tables, so I checked this year and once again, Turbo Tax is calculating it wrong.  I can't override the system to fix it.  I can't call anyone to get the tax tables fixed.  This is horrible customer experience.

[Mike9241]

we can't see your return. there are multiple ways that your taxes can be calculated and the tax tables won't work if for example, you have qualifying dividends or net long-term gains.  this would likely be the case if the tax tables are showing a higher tax than what Turbotax calculated. from what I've seen threads about tax calculation errors and responses it's the taxpayer that doesn't understand all the rules and methods.  and that penalty could have been due to inaccurate entries by the taxpayer.  if Turbotax made an error that cost you penalties and interest file a claim.