2023 Tax brackets math

[roscoe]

I built a spreadsheet that calculates the taxes for US Married Filing Jointly that I had verified previously that it works...and it really isn't that complicated. However, it's not matching TurboTax, and since I want to use it to predict next years taxes I really need to get it working. There's a chance that my inputs are slightly off by misinterpreting numbers on my TurboTax 1040 (but I don't thinks so). This has me stumped.

Does anyone have similar (verified) spreadsheet they can share, or know where I can find one online (Google has not been finding anything useful)? I'd like to see all the steps (it's obviously a progressive tax rate so one steps through the brackets to get to the final answer.

Of course, if anyone has a one-formula-does-it-all I would certainly use to to see if it matches my math.

Note: I tried to upload it but the add-in feature only has instructions for Windows and I'm using a Mac so I created two pictures, one showing the results and the other showing the formulas

Thanks!!

 

[AhoyNC]

Take a look at this link.
It has a free spreadsheet for 2023 taxes and a 2024 forecast.
www,excel1040.com

 

[roscoe]

Been there. First, it doesn’t show the math. Second, you can’t just enter the taxable income, you have to go through go it form by form, and I still wouldn’t learn anything

Thanks anyway

 

[AhoyNC]

This link shows how to calculate tax brackets in one cell using SUMPRODUCT.

McGimpsey & Associates : Excel : Using SUMPRODUCT() with variable rates

 

[roscoe]

Thanks...but I now know what I did. The math was right, but that doesn't account for income taxed at different rates (e.g. capital gains)

 

[roscoe]

This link shows how to calculate tax brackets in one cell using SUMPRODUCT.

McGimpsey & Associates : Excel : Using SUMPRODUCT() with variable rates

Interesting...because I can't reproduce his results. I copied the array formula to a cell, changed the numbers to match mine, and couldn't make it work. Doesn't help that he doesn't provide the income that goes into the equation, just the math...

 

[roscoe]

Disregard...some subtleties I missed (high threshold changing to low threshold, etc...).

so (1) my math was right and (2) McGimpsey & Associates presented a cool method to do the same thing I was already doing in a brute force manner

Thanks to all for helping

 

[Dave Patton]

You could search for "tiered formulas", "income tax calculations", etc.
The following shows the calculation. You can review the formula with Excel's formula evaluation.
You did not mention how the capital gains are calculated.

Commission Tax Fee.xlsm
	A	B	C	D
1		Taxable Income	Tax v1	Tax v2
2		170,000.00	28,015.00	28,015.00
3
4
5		Married
6		Excess over	Rate	Rate Differential
7		rB		rR
8		0	10%	10%
9		22,000	12%	2%
10		89,450	22%	10%
11		190,750	24%	2%
12		364,200	32%	8%
13		462,500	35%	3%
14		693,750	37%	2%
1ff

Cell Formulas
Range	Formula
C2	C2	=SUM((B2>rB)*(B2-rB)*rR)
D2	D2	=SUMPRODUCT(--(B2>rB),B2-rB,rR)
D8:D14	D8	=C8-N(C7)

Named Ranges
Name	Refers To	Cells
'1ff'!rB	='1ff'!$B$8:$B$14	C2:D2
'1ff'!rR	='1ff'!$D$8:$D$14	C2:D2

 

[roscoe]

I didn't calculate the Cap gains, just remembering that I had some meant that a portion of my taxes were taxed at a lower rate and that explained why my numbers were off from Turbotax.

Thanks