Question

Where does the Blended Tax Rate come from

Forum|Forum|6 years ago
February 4, 2020
4 replies
0 views

No text available

TurboTax Deluxe Online

According to the IRS, "A corporation with a fiscal year that includes Jan. 1, 2018, will pay federal income tax using what is called a blended tax rate. Then calculate their tax using the new 21 percent rate. Proportion each tax amount based on the number of days in the taxable year when the different rates were in effect." Here is an IRS link that explains this concept.

if you are an individual, then you may be thinking about effective tax rate. This is a tax rate that takes into account long-term capital gains and ordinary income. These are taxed at different tax rates and when you combine the two, the effective tax rate is the result.,

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

P

pmount369

Why would Turbo Tax have OVER 50% higher tax rate than the IRS or other tax sites? We use TT every year and for some reason our blended tax went from 14.8 to 34.7. No self employment, and the income only increased by $1200. I called in and they said the IRS was giving that %, but that is not correct as I have gone to HandR Block and the rate was correct. It has us paying out over $22,000 here. Makes no sense. *EDIT* The TT calculator even has our rate as 22%. Is there a bug you're dealing with?

C

cpharshbarger

I'm dealing with the same issue. I just called customer support to tell them I think it's a mistake and they sent my call to a certified CPA that I would have to pay $80 to speak with them. I don't want a CPA I want the software people. It's got to be a glitch!

S

staaa

I'm wondering this too.

Compared to looking up tax in the 2019 tax table, the number is widely different from what using this "blended tax rate" calculates.

L

lmsmunchkin10

This is crazy! We're doing our taxes now & can't get a hold of anyone w/o having to pay for the tax help. And if you guys were having this issue in February and the same issue is still here in April, they obviously don't care to fix the glitch. Anyone else get this figured out in Turbo Tax, or did you all go to another software to file?

Thanks for your feedback. I did go in and look at the form directly and it looks like the calculations are correct. I think the breakdown of the total with the term blended tax rate is what made us flip.. when that's not the actual tax rate being used on the taxable income. Wish they would fix it and show it better. Crossing fingers it's fine, will have to let hubby look it over to verify. Just sucks we possibly owe this year and we haven't in a few years.

K

Kgeilhart15

Did you ever get this figured out? My taxable income is just over $2000 and I owe almost $3000 shows my rate is 172%

DawnC

Employee

Do you owe self-employment tax? Go back through your tax return and double-check all of your entries. The blended tax rate is: Tax Liability / Taxable Income - it is not used in the tax return. Preview your Form 1040 and check these lines:

Line 15 - Taxable Income

Line 24 - Total Tax

Line 25 - Withholdings

Line 33 - Payments including Credits

Line 34 - Overpayments

Line 37 - Tax owed

@Kgeilhart15

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"