Is Tax Planner income tax incorrect? (even though taxable income is correct!)

Frustrated123

The tax planner arrives at my correct taxable income (i.e., essentially the same number that TurboTax arrived at), but calculates a higher total tax than TurboTax does. It looks like since I last ran the planner they updated the program to account for the new OBBBA deduction. Now the OBBBA amount gets added to the standard deduction, but it looks like maybe the Taxable Income doesn't reflect the OBBBA deduction and thus the computed tax is too high.

Anybody else seeing this?

Frustrated123

I don't think either of those is an issue since the Taxable Income is correct.

I also have a spreadsheet that calculates my taxes (which I use mainly to calculate my estimated tax payments). If I include the OBBBA in my spreadsheet computation, the result agrees with TurboTax within a few dollars (i.e., my spreadsheet calculations are pretty reliable). However, if I exclude the OBBBA in my computation, the result agrees (within a few dollars) with the Tax Planner. That's what makes me suspect that the Tax Planner is displaying* the OBBBA amount, but then forgetting to take it into account in calculating the actual tax.

Ok, some hours later, things have changed!! Several hours ago, I ran Tax Planner again, and multiple new things were messed up. Now I'm back from lunch, and everything appears to be corrected. The Taxable Income is the same correct number that it had yesterday. However, now the Income Tax calculated on that amount has been lowered to approximately the amount that TurboTax and my spreadsheet calculate.

[Edited - Readability]

Frustrated123

sorry, I mis-spoke. The Taxable Income amount shown* is correct, but it looks like the amount they are using to actually compute the tax does not include the OBBBA adjustment.

Quicken Kristina

Hello @Frustrated123,

Thank you for sharing! What you're observing is probably a result of the fix to an earlier issue with the standard deduction. See this earlier discussion for more information:

https://community.quicken.com/discussion/7965525/standard-deduction-for-seniors-updated-but-is-wrong

Thank you!

Jim_Harman

There are some other things that might cause the Tax Planner's income computations to be off:

• In the Interest and Dividends section, Quicken does not normally track Qualified dividends, which are taxed at a lower rate. This causes it to assume that all of your taxable dividends are fully taxable. You should enter the full amount of the dividends on the Dividends line and the portion that are Qualified, such as those from US stocks and stock funds and ETFs, on the Qualified Dividends line, just as you do on your tax return.
• If you are receiving Social Security income, only a maximum of 85% of it is taxable. If you have a Reminder set up for the full amount, you must enter a negative adjustment for the correct percentage reduction in the Other Income/Taxable Social Security Benefits section.

Frustrated123

I don't think either of those is an issue since the Taxable Income is correct.

I also have a spreadsheet that calculates my taxes (which I use mainly to calculate my estimated tax payments). If I include the OBBBA in my spreadsheet computation, the result agrees with TurboTax within a few dollars (i.e., my spreadsheet calculations are pretty reliable). However, if I exclude the OBBBA in my computation, the result agrees (within a few dollars) with the Tax Planner. That's what makes me suspect that the Tax Planner is displaying* the OBBBA amount, but then forgetting to take it into account in calculating the actual tax.

Ok, some hours later, things have changed!! Several hours ago, I ran Tax Planner again, and multiple new things were messed up. Now I'm back from lunch, and everything appears to be corrected. The Taxable Income is the same correct number that it had yesterday. However, now the Income Tax calculated on that amount has been lowered to approximately the amount that TurboTax and my spreadsheet calculate.

[Edited - Readability]

Quicken Kristina

Thank you for the follow-up,

I'm glad to hear that the Tax Planner is now showing about the same amount as TurboTax and your spreadsheet!