2022 tax calculation error?

jrwise

I'm seeing a tax calculation error in the tax planner for 2022. Using the quicken 2022 tax table and 100k taxable income, I calculate 17836. Setting the tax planner taxable income to 100k calculates 16808. The tax table matches the tax due from the IRS witholding calculator. The quicken tax planner does not.
can anyone confirm? thanks

Jim_Harman

Like you, I get

Wage = 90000 LTCG = 10000 tax = 14068
Wage = 80000 LTCG = 15000 tax = 13718

This all makes sense because capital gains are taxed at a lower rate than earned income. What exactly do you think the problem is?

Sherlock

Please provide the version of Quicken being used: select Help > About Quicken

According to the published release notes, R36.57 includes the updated tax rates for 2022.

We're still using R36.38.

jrwise

I'm at R38.29

Jim_Harman

So we are doing apples to apples, is the taxpayer single, $100K income is all from wages, no withholding, no extra deductions?

With those settings for 2022, I get
$12,950 standard deduction
$87,050 taxable income 
$14,768 tax due

I am running R38.29

jrwise

thanks Jim. I had entries in wages, interest, dividend & LT cap gain, adjusted income and itemized deductions.
Entering your numbers above as a scenario entry, I get 14768 also.
To isolate the error, I added an amount to each entry that I use and deducted it from the wage entry. I think its coming from the LT cap gain.
Please revise your entries to wage=90000, LT CG=10000 to keep the same taxable income amount and see if the tax due changes. I get 14068. Setting wage=85000 & LTCG=15000, I get 13718 due.
Joel

jrwise

Also, filing status is single.

Natarajan

I was trying Tax calculation in Quicken Deluxe for 2022. It lump sums all income into one category. SS income, and retirement incomes are separate. I normally pay only 40%-50% of my SS income. So, if retirees were to use this tool, you will all be screwed up by this tool. Quicken guys need to learn some more tax laws and change this part.

Jim_Harman

Like you, I get

Wage = 90000 LTCG = 10000 tax = 14068
Wage = 80000 LTCG = 15000 tax = 13718

This all makes sense because capital gains are taxed at a lower rate than earned income. What exactly do you think the problem is?

Jim_Harman

Remember that the Tax Planner is just that - a planner. It does not necessarily cover all types of income or situations. That is what TurboTax does.

@Natarajan - The taxation of Social Security benefits is a known limitation of the Tax Planner. To vote for improvements, please review, comment, and vote on this Idea post. The Idea also has some work-arounds for this issue.
https://community.quicken.com/discussion/7854216/tax-planner-compute-taxable-social-security-income

mrzookie

I'm using the tax planner on r37.67.  I have reg income, SS income, interest, dividends, cap gains (L&S), std deduction and some odds and ends income/credits/deductions adding up to over $100k. I have the info in the planner (user entered) as well as in TT 2021. The final tax numbers are consistently less than $25 apart. I'd say its pretty close. Same thing last year.

Chris_QPW

@mrzookie From what I understand the real problem here is that how much of Social Security will be taxed varies depending on how much income you have, and the planner seem to have a fixed percentage.

So, whereas the number might right for you it might not be right for another person with a different income.

jrwise

Jim, thanks for the verification. I forgot about the different rate. The IRS witholding estimator lumped all gain in one entry so I assumed it was correct.
thanks for the help!

mrzookie

Yeah, there's a little calculation to determine "combined income" but as far as I can tell, there's only 2 levels - 50% or 85% taxable. My case is the latter, and all I do is enter 85% of the SS number into the planner, and its all good. I manually enter the number. If you're relying on the Q provided number, I can see why this can be a problem.

Chris_QPW

mrzookie said:

Yeah, there's a little calculation to determine "combined income" but as far as I can tell, there's only 2 levels - 50% or 85% taxable. My case is the latter, and all I do is enter 85% of the SS number into the planner, and its all good. I manually enter the number. If you're relying on the Q provided number, I can see why this can be a problem.

Yes, going by the idea that @Jim_Harman pointed out they want the Tax Planner to do that for them.

BTW I think there is a third level, 0%, if for instance all you had is Social Security as an income.

mrzookie

@Chris_QPW

You are correct. If "combined income" is under $25K, or $34 MFJ, SS is not taxed.