Turbo Tax vs IRS Tax Tables ??

[Amy]

Has anyone ever found a discrepancy between what Turbo Tax says your tax is and what the IRS says? Here's the situation: (and I DID have Turbo Tax check for updates)

I did the taxes for DH and me using Turbo Tax like I've done since 1996. Unfortunately, our investments for DS16 did pretty well this year, and since he's over 14 he needs to file his own fed. tax return. I got the 1040EZ off the irs.gov website and filled it out. He ended up with a taxable income of $270, and the IRS tax tables said his tax is $26.

Just for fun, I ran DS16's numbers through Turbo Tax. I know, overkill, since he has no job and his only income was interest and dividends. Turbo Tax came up with the same taxable income of $270, but said his tax is only $14! What gives?

Then I looked at the taxable income for DH and me. I compared the tax that Turbo Tax computed vs. the tax on the IRS website, and there's a difference of $502.

So.....do I file with Turbo Tax and get a larger refund? Turbo Tax says it's guaranteed and that they'll pay any penalty and interest, but we'd still have to repay the difference. Has this happened to anyone else?

I've never double-checked Turbo Tax vs the IRS booklets before; I always assumed that as long as I checked for Turbo Tax updates up until I filed my return I'd be ok. Now I'm wondering if there are other errors in prior years??

 

[Toby'sFriend]

I truly would fall over dead in shock to find out Turbo Tax had the tables in there wrong.

What line are you looking at on the 1040EZ when you say taxable income? Did you fill out the worksheet to compute his standard deduction correctly?

 

[salmoneous]

Just to be clear, are you saying Turbo Tax is shownig $270 on line 6 and $14 on line 10?

 

[Amy]

When I did the Form 1040EZ, I have $270 on line 6 and on line 10, I looked at the tax tables on the irs.gov website and found $26 for the tax due on that $270.

Turbo Tax does a regular 1040, not the EZ. On the 1040, taxable income is on line 27, and then on line 28 is where Turbo Tax puts the tax. Line 28 is where Turbo Tax said that the tax on that $270 is only $14.

And yes, Toby's Friend, I did the worksheet on the back of the EZ since we're claiming DS as a dependent on our form.

This is too weird.....

 

[mom2kazkids]

I had a $45 difference from the tax tables and turbo tax. I called turbo tax and asked them about it, and they said that things we taxed slightly different because I had capital gains, and dividends. They also said that they would stand behind their calulations if we were audited.

Barb

 

[Amy]

I had a $45 difference from the tax tables and turbo tax. I called turbo tax and asked them about it, and they said that things we taxed slightly different because I had capital gains, and dividends. They also said that they would stand behind their calulations if we were audited.

Barb

AHA! Maybe that's it - most of DS's interest & dividend income (and ours) is from capital gains. Now I feel better about the $500 difference with our tax return. So......I guess I'd better download and the print all the instructions for 1040EZ and see how I account for his capital gains. It's only a $12 difference, but why give the government any more money than they're entitled to? Unless if you use 1040EZ you don't get to use the option for the different tax on capital gains. Dang! Here I thought I was all done with taxes and now I've got more research to do.

 

[inneedofvacation]

You can't use 1040EZ with capital gains. You will have to move up to 1040!