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Best Answer Click here
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Ok - sentences forthcoming.
I discovered $2,000 of additional retirement income from a traditional IRA. That increase was the only line item that changed. Taxable income increased from $84,030 to $86,030. Federal tax per Intuit increased $540 and I think it should only increase $440 because both taxable amounts are in the 22% bracket. Why was the increase $540?.
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@ralphlnafziger wrote:
Ok - sentences forthcoming.
I discovered $2,000 of additional retirement income from a traditional IRA. That increase was the only line item that changed. Taxable income increased from $84,030 to $86,030. Federal tax per Intuit increased $540 and I think it should only increase $440 because both taxable amounts are in the 22% bracket. Why was the increase $540?.
So line 16 of the 1040 increased by that much? Or are you looking at something else that shows something increased by $540?
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Was Social Security already 85% taxable before the change? What credits are they claiming?
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"Why was the increase $540?"
What is the error? There could be additional tax or penalty, based on what happened. Details matter.
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Yes, line 16.
But . . . . I just had an "ah ha moment". I believe the increased RMD may have changed the taxable amount of capital gains.
FYI - I only do a couple of simple returns for close friends.
Thanks for your reply - it got me thinking of more than brackets!!
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"I believe the increased RMD may have changed the taxable amount of capital gains."
So, in addition to QCD, there is taxable RMD? Or, too much QCD? There are ordering rules for QCD and RMD; I don't know if that helps. Here is a nice article:
https://obliviousinvestor.com/qualified-charitable-distributions-from-an-ira-with-basis/
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Did you make the proper entries for the QCD?
Answers are easy. Questions are hard!