Question

turbotax calculates 2020 estimated taxes wrong?

Forum|Forum|5 years ago
June 14, 2020
1 reply
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For a given projected 2020 taxable income, TT shows a projected income tax that is significantly different from what you get in IRS's 2020 Tax Rate Schedule, as shown on "Estimated Taxes and Form W-4 Worksheet". (e.g., for a taxable income of $62,583, it calculates $2,578 vs I calculate value from schedule of $7,114, for married filing jointly). Seems wrong.

(Note: If I say I only have WAGE income, then tax is calculated correctly. Problem occurs once you add Sched C income.)

Carl11_2

There is no problem and the estimates are correct, based on the data that you personally entered. Self-employment income reported on SCH C is subject to regular tax, plus an additional 15.3% self-employment tax. So it's no surprise that self-employment income would have an overall tax rate of around 30% or higher.