Skip to main content
January 23, 2025
Question

The app is not calculating my “Tax Liability” accurately. Total taxable income multiplied by the tax rate of 11.3%, off by about $25. Which increases my refund. Help.

  • January 23, 2025
  • 2 replies
  • 0 views
No text available

    2 replies

    SteamTrain
    Employee
    January 23, 2025

    There is no 11.3% rate.

     

    That rate is just an approximate/handwaving number.

     

    Your actual taxes are calculated using either:

    the IRS Tax tables

    or

    one of ~ 7 different tax calculation forms, depending on what types of income were in your tax file.

    ____________________

    At this point in time, there are no known Federal tax calculation problems  (but it is early).

     

    IF..(big IF)  if you have a simple tax return, with just ordinary wages and simple interest,  that only uses the IRS tax tables (and  no Self Employment income, no qualified dividends, no capital gains or losses)

     

    Then, you take your "Taxable Income" (line 15 of the Form 1040), and compare it to the IRS tax tables to get the tax that the IRS will assess:

     

    Publication 17 (2024), Your Federal Income Tax | Internal Revenue Service

     

     

    ____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
    VolvoGirl
    Employee
    January 23, 2025

    It depends what kind of income you have. Even though the full amount shows up in the total income on the 1040 line 7, 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 the worksheets to see it.