Question

Turbotax lists an effective tax rate of 19.45% for my 2022 fed return. I get 21.02% when I use their numbers and divide total tax by taxable income. Can anyone explain?

Forum|Forum|3 years ago
March 31, 2023
2 replies
0 views

I have complicated returns that I understand pretty thoroughly. This year I decided to file my own returns using TurboTax. I was surprised by how well TurboTax worked. Then, after I filed, I caught this small discrepancy. Should I be concerned about this -- or about TurboTax more generally?

TurboTax Deluxe Online

G

Gordon9

The calculation appears to be Tax divided by AGI (adjusted gross income). You would not want to use Taxable Income because that number has been reduced by your Std deduction or your Sch A itemized deductions, whichever is larger, which does not represent your Income properly.

B

bridgeportstorkAuthor

That's it -- thank you!

M

Mike9241

no you shouldn't be concerned. it's informational. what is important is that the actual tax calculation be correct. it can also be extremely misleading for those that have self-employment tax.