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C
crikeymcbikey
March 6, 2020
Solved

The effective tax rate calculation is wrong on page 1 of my return: 16.53%. If I divide my "Total Tax" by my AGI, I get 22.6%. By my Taxable Income, I get 25.3%. Why?

  • March 6, 2020
  • 2 replies
  • 0 views
Even if I divide by my Total Income from line 7b of my return (which is obviously wrong but the largest number anywhere in my return), I get 20.4%. (The numerator for all of the above is line 16, Total Tax.)
Best answer by JulieS

TurboTax divides your total tax from line 12b, by your total income, line 7b, to get the effective tax rate.

 

This figure is just informational, it does not appear on your tax return or affect the amount of tax that you pay. 

2 replies

M
mglauner
March 6, 2020

Don't worry about the Effective Tax Rate. Essentially, effective tax rate is just the average tax rate you pay on all of your income.

 

Click this link for more info on Effective Tax Rate. 

 

See the screenshot below for Tax Brackets for 2019.

 

 

 

 

 

C
crikeymcbikeyAuthor
March 6, 2020

That's not helpful at all. The number that TurboTax is showing is flat out wrong. I know what tax brackets are, and I know what an effective tax rate is. There is no way to come up with their number.

    J
    JulieSAnswer
    March 6, 2020

    TurboTax divides your total tax from line 12b, by your total income, line 7b, to get the effective tax rate.

     

    This figure is just informational, it does not appear on your tax return or affect the amount of tax that you pay. 

    **Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"
      M
      mb92079
      December 20, 2020

      Then what is the point of Turbo Tax "effective tax rate" if its not even close to ones actual "real" tax rate? Confusing and misleading seems.

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