Question

1099-INT is calculated wrong charging 30% Tax rate

Forum|Forum|2 years ago
February 28, 2024
2 replies
0 views

Hi,

For Married Individuals Filing Joint Returns - $89,450 to $190,750 - I am at $147000 Gross. (22% bracket)

When I add 1099-INT $1000, my tax return is reduced by 30%. instead of 22%, why it's reducing it to 30% ? How the turbo tax calculates my returns is confusing.

Thanks

V

Vanessa A

If your refund is reduced by 30% it is likely because when you added the interest, you lost a credit of some sort. The best way to tell exactly what is changing is to look at your 1040 form and compare line by line the numbers on the form when you have the interest entered and when you don't. So start by looking at your form 1040 (and either printing it - if you are using the desktop version or have already paid for the online version or writing all the numbers down) while you have the 1099-INT entered, then go back and delete the 1099-INT and compare the numbers. This will tell you exactly what has changed.

On the menu bar on the left that shows.

Select Tax Tools
On the drop-down select Tools
On the pop-up menu
Select View Tax Summary
On the left sidebar, select Preview my 1040
On the menu bar on the left that shows.

Select Tax Tools
On the drop-down select Tools
On the Pop-Up menu select Delete a Form
This will give you all of the forms in your return
Scroll down to the form you want to delete
Select the Form
Click on Delete.

Always use extreme caution when deleting information from your tax return.  There could be unintended consequences.

To do this in the desktop program, you will just switch to forms mode.

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VolvoGirl

Employee

When you enter one taxable transaction, you can't just watch the monitor. You increased your overall adjusted gross income and with that come many other changes in your return, not just the incremental tax on the one transaction.

Like for example it increased your AGI and that would decrease some deductions if you itemized on Schedule A. And by increasing your AGI it might reduce some credits you were getting like EIC. And can make more of any Social Security taxable.

You would have to compare both returns line by line before and after you entered the income to see all the changes.

I once added $6 in interest and the tax went up $12! It pushed me into the next tax bracket. I was right at the line.