How is TurboTax calculating the marginal tax rate shown on its Summary table? Have you checked your math? The result appears to be grossly incorrect when compared to a manual calculation of added tax for an additional $1000 of income. For example, Turbo Tax shows a marginal tax rate of 18% on a reurn where the actual marginal tax rate is closer to 30%. There is a long history of this product defect as shown at the following link:
Thank you for your feedback on this issue- I am sending this to the appropriate team and will contact you back here with results.
Thank you for your patience in this matter.
There is no fix at this time.
Please note that you can go to the CRA website and figure your amount there. How to calculate your marginal rate.
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Same issue for my spouse's calculation in the Summary. She has a much higher taxable income and a much lower marginal tax rate.
Given the fact that the defect in the Turbox calculation of marginal tax rate has been known for several years, the fact that it has not been corrected by Intuit and that there is no ETA for when it will be corrected, is Intuit sending users a “signal” that it is either discontinuing support (ie. no longer investing in this product) or is going to discontinue the product altogether? It is well known that there are other competing products on the market.
Unbelievable! Turbotax answer for a problem with their program is to calculate it yourself by going to the CRA website? This is a very easy thing to calculate, but it seems beyond Turbotax capabilities. Meanwhile giving WRONG information out is worse than giving no information at all concerning the Marginal Tax Rate.
I have just noticed this too. This should be such an easy fix. I went back to my previous returns and noticed in the 2016 summary the Marginal Tax rate calculation in the summary was missing. If you go into the help there is an article on how to calculate it manually. (see below).
I used this method in other years' returns including 2022 and they all do not match up. Please fix this!
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The marginal tax rate helps you understand the impact of claiming deductions to your bottom line - such as contributing more to your RRSP or claiming additional medical expenses. As you enter each piece of tax information, this rate changes.
TurboTax shows your Refund/Balance Due information at all times, so you can immediately see how each entry or change affects your return.
However, if you want to know your marginal tax rate, you can calculate it in the following way:
While in EasyStep, this amount is shown in the upper left corner of the interview screen. If you are creating a coupled return, the amount shows the net benefit to both spouses. Under REVIEW, click Detailed Tax Summary to see each spouse's individual amount.
While in Forms mode, click the Summary icon to see the Quick Graphs. Click Detailed Tax Summary to see more information.
In the Income section of the Find window, select Other Income Sources.
Double-click in line 130 to open the Other Income worksheet, and scroll down to line Other.
The difference between the two numbers is your marginal tax rate, which is the rate at which your next dollar of income will be taxed.
Example: Your refund before entering the $100 of other income is $500. After entering $100 of other income your refund changes to $470. Your marginal tax rate would be 30%; the difference between $500 and $470.
Same issue here. It is ridiculous that this is even happening yet alone no ETA on a fix.
Thank you for your feedback, we value your opinion have shared this information with the proper TurboTax team.
In order to help you with this situation, we believe your best option is to contact our telephone support team for further assistance, as they have the option to view your screen to help resolve the issue. To contact them, please follow this link: Contact Us.
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Thank you. I called support and shared my screen to show that my Marginal Tax rate displayed as 15% in the quick summary is incorrect. Taxable income is between 50-100K so even on step 5 of the T1 the Federal Marginal Tax rate is already 20.5% which is more than the 15% shown. Add on 9.15% for the provincial Marginal Tax bracket in Ontario (Form ON428), the marginal tax rate should be 29.65%, not 15%.
The support analyst indicated that I would need to speak to a tax expert to resolve this. Because I have the Standard version, it would cost $54.99 to consult with a tax expert. I will not be doing this.
They did say that they would escalate this internally to see if it is a bug. If it is someone would be back to me. If it is not they will not. I received and email confirmation indicating the case was closed, however I still don't think the issue is resolved.
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The issue isn't 'how to calculate the marginal tax rate' - but rather that Turbotax gives a wildly inaccurate percentage as your marginal tax rate rather than the correct one. Better to NOT even quote a marginal tax rate than give an inaccurate rate. This 'bug' has been in Turbotax for years and STILL isn't corrected.