Where in TurboTax can I see the calculations used to determine Total Tax?

Forum|Forum|2 years ago
December 17, 2023
3 replies
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Is there a worksheet or other area in TurboTax to view the calculations used to determine Total Tax?

In other words, I'd like to see how 1040-SR gets from Line 15, Taxable Income, to Line 16 Total Tax. (When looking at the 1040/1040-SR Wks form, which shows the Tax Smart Worksheet for Line 15, the first line, A, has a value, but it doesn't show HOW it was calculated.)

The objective is to help me figure out a discrepancy: TurboTax (as well as an on-line Tax Calculator) both show the same amount for Total Tax. However when I calculate the tax manually (MFJ 2023 Tax Rates) by adding $2,200 + 12% of the amount over $22,000 of taxable income, THAT calculation produces a higher amount than TurboTax (and the on-line calculator) for Total Tax. Seeing the calculations of how Total Tax, Line 16, is derived should help me see what I am missing, to help solve why there is a discrepancy.

Best answer by VolvoGirl

Even though the full amount shows up as income on the 1040 as income, if you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from schedule D. The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet. It does not get filed with your return. In the online version you need to save your return as a pdf file and include all worksheets to see it.

For the Desktop version you can switch to Forms Mode and open the worksheet to see it. Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.

https://ttlc.intuit.com/community/forms/help/form-1040-line-11-amount-is-less-than-standard-irs-tax-table/00/25752

VolvoGirlAnswer

Employee

Even though the full amount shows up as income on the 1040 as income, if you have capital gains or qualified dividends the tax is not taken from the tax table but is calculated separately from schedule D. The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet. It does not get filed with your return. In the online version you need to save your return as a pdf file and include all worksheets to see it.

For the Desktop version you can switch to Forms Mode and open the worksheet to see it. Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.

https://ttlc.intuit.com/community/forms/help/form-1040-line-11-amount-is-less-than-standard-irs-tax-table/00/25752

rjs

Employee

Line 16 is not Total Tax. It's just Tax, based on the income on line 15. Other taxes get added below that. Total tax is on line 24.

On the Tax Smart Worksheet, below line A there are 7 check boxes. The one that is checked indicates what worksheet was used to calculate the tax. But if box 1 or 2 is checked, there is no worksheet in TurboTax. It just uses the Tax Table or Tax Computation Worksheet in the IRS instructions for Form 1040.

The calculation that you are using, $2,200 + 12% of the amount over $22,000, is from the Tax Rate Schedules in the IRS instructions. The "Caution" at the top of that page tells you not to use it to calculate your tax. The check box below line A of the Tax Smart Worksheet shows you the method that has to be used to calculate your tax.

You didn't say how much the difference is between your calculation and what TurboTax calculated. If the difference is small, since your taxable income is less than $100,000 you probably have to use the Tax Table (box 1 on the Tax Smart Worksheet). The Tax Table is based on $50 increments of taxable income. All incomes in a particular $50 range have the same amount of tax, so there can be a variance of a few dollars from an exact percentage.

If the difference is more than a few dollars, it's probably because you have qualified dividends or long-term capital gains, which are included in the taxable income on line 15 but are taxed at lower rates. In that case, the tax calculation is probably done on either the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet (box 3 or box 4 on the Tax Smart Worksheet).

Q

QuestionaskerAuthor

Employee

Thank you, The discrepancy I was seeing was due to having qualified dividends and also having long term capital gains, and therefore needing to remove those amounts from taxable income before calculating the total tax manually. (I'm waiting until TurboTax releases more forms for 2023 so I can use the 2023 version, with updated standard deduction and other differences, instead of 2022 version, to do some accurate "what-ifs" before year end.)

P

PoppiBS

Thank you for publishing this question last year. The issue still remains and I believe I've tracked my solution down to differences in Capital Gains and its affect on my overall tax (for previous years but using old data to plan for year-end tax planning...) My question is : why can't TurboTax just add a worksheet that clearly summarized the calculations for line 16??! Seems like a simple and easy solution to put into place. And please don't tell me that the "tax smart worksheet" does the job because I have searched the complete set of my previous year documents, and that worksheet doesn't exist in my data/document set.

Anyway, thanks for asking the question as it is the same place my audit of previous year taxes paid went off the rails...

rjs

Employee

@PoppiBS

TurboTax can't provide a simple summary of the calculation of the tax on Form 1040 line 16 because the calculation is very complex. The IRS instructions for line 16 in the Form 1040 Instructions are more than a full page of text plus two worksheets, and they reference a number of other forms and worksheets in other IRS documents. There are seven different methods that can be used to calculate the tax, depending on what is in the tax return. There's no simple way to summarize all of that.

No one said that the Tax Smart Worksheet in TurboTax shows you the calculation of the tax. All it does is tell you which one of the 7 methods was used. The Tax Smart Worksheet is not included in the PDF of your tax return. In the desktop TurboTax software you can see it in forms mode, and save it to a PDF if you want to. There is no way to see the Tax Smart Worksheet in TurboTax Online. A "Smart Worksheet" in TurboTax is not a separate form or worksheet. It's a box embedded in another form or worksheet. The Tax Smart Worksheet is between lines 15 and 16 in the first section of the "Form 1040 or Form 1040-SR Worksheet."