wrong TAX calculation?

[zymxhjjtm197227]

Hi,   i am MFJ with taxable income $82000. I am supposed to pay 10% on part <$19900, 12% on $19901 - $81050, and 22% on part over $81050 according to TAX bracket. which is around $9530. however TT calculated my TAX  is $19000. why is that ?

[DoninGA]

You need to look at your actual federal tax return Form 1040.

The taxes on your taxable income on Line 15 is reported on Line 16.

You can have other taxes owed such as Self-Employment taxes on the net profit from Self-Employment.  Or a tax liability from the early withdrawal from a retirement account.

Review Lines 17 thru 23 for other taxes.  Your Total Taxes are shown on Line 24.

Using the desktop editions click on Forms.  When in Forms mode open your Form 1040, Schedule 2 and Schedule 3.

Using the online editions - 

You can view your Form 1040 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

[MayaD]

Are you self employed? The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security and 2.9% for Medicare.

Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax.

[zymxhjjtm197227]

i am looking at 1040form, line 15 is $82000, line 16 is $19000. I am not self employed. but part of my income is foreign income and I've done foreign  income exclusion.

[zymxhjjtm197227]

continue: line 16 is  calculated base on line 15 right? if my line 15 is $82000, my line 16 should be $9532, but my 1040 line 16 is $19000.

[DoninGA]

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@zymxhjjtm197227 wrote:

continue: line 16 is  calculated base on line 15 right? if my line 15 is $82000, my line 16 should be $9532, but my 1040 line 16 is $19000.

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On the Form 1040 Line 16, are there any boxes checked for Forms 8814, 4972 or any other boxes in (3)?

When in Forms mode click on the box for the amount in Line 16 of the Form 1040.  There should be a magnifying glass presented, click on the magnifying glass.  This should take you to the Form 1040 worksheets Line 16,  On the Form 1040 worksheet click on the box for Line 18 and then click on the magnifying glass.  This should take you to Schedule 2.  Are there any taxes shown on Schedule 2?

[zymxhjjtm197227]

none of the three boxes are checked. I followed your instruction to check the magnifying glasses, and there is no tax on schedule 2

[DoninGA]

I do not see how the Foreign Earned Income and Exclusion on Form 2555 could have caused the increase of taxes so have ruled that out.

There must be something listed in your tax forms, schedules on the left side of the screen which would affect the taxes owed on Line 16, but right now I am at a loss.  Usually the explanation is because of additional taxes from Schedule 2.  Or Self-Employment taxes.

My suggestion would be to save this tax return and start another with the same information and see if you get the same result.  Rename the name for this tax return in the File menu located in the upper left of the desktop program screen and click on Save As...use a name that will identify this return so if you start a new return it will not overwrite this return.  The tax file name always starts with the Last Name and then the First Name Initial  from the first person on the tax return.

Otherwise you could send a redacted tax file to TurboTax support so they can do an investigation.  

One of the TurboTax Expert employees can ask for the redacted tax file.  You would only need to click on Online at the top of the desktop program screen and then click on Send tax file to agent

@MayaD Can you or one of the other Tax Experts look at this tax file when sent?

[zymxhjjtm197227]

Hi, Thanks. I've sent the file, the token number is 991363. what do I do now?

[PattiF]

The tax rate for the taxable income is based on the income before the exclusion, but then it is just applied to the taxable income. You are in the 24% tax bracket.  Your taxable income of $82,000 is taxed at 24%: 82000 x .24 = 19,680. This will not add up exactly because some of your income is dividends. Since we got very close to the number in TurboTax, it does tell us how this is being determined.

See the Foreign Earned Income Tax Worksheet at this link. This will explain how the tax is calculated as well.

[mesquitebean]

I'm a fellow user, not a tax person.  But this is my basic understanding in general of how the foreign income exclusion can affect the tax rate, and does not address your specific figures.

When you have the foreign income exclusion, the excluded amount is applied first to the lower tax bracket rate(s)  and thus precludes the lower rate(s) from being used by the taxable income (or part of the lower rates depending on the amount of the exclusion.)  So the excluded amount throws aside all or part of the lower bracket(s) first so that the lower rate(s) is/are no longer available to the taxable income.  So the remaining (non-excluded) income ends up taxed at a higher bracket rate.  Therefore the tax amount is higher than using the IRS Tax Tables alone.

[zymxhjjtm197227]

thanks for the clarification.