I first compute my taxes by hand. Then I enter the data into an e-filing program. One of the major tax programs was $7 off my calculation but not in my favor. Therefore I entered my own data into the Federal free e-file and submitted it that way instead.
Here is where I see the discrepancy between my calculations and the e-filing program's:
1. They rounded all my Federal Tax Payments separately from different accounts and then combined them. Example with sample numbers: $1400.41 became $1400; $430.30 became $430, which equals $1830. But $1400.41+$430.30= $1830.71, which rounds to $1831. The 1040 directions state to add all the numbers (and then round).
2. The e-filer calculates the exact tax, whereas the 1040 (if done by hand) directs us to use the tax tables if under 100K to determine the tax. The tax table has ranges in $50 taxable income increments. If one's taxable income is at the higher end of that $50 range, then it's favorable to use the tax table (you'll have a few bucks less in tax). If one's taxable income is at the lower end of the $50, then you'll be charges a few bucks extra by using the table instead of doing the actual percentage calculation.
Took way more of my time to do my taxes by hand and then look for the discrepancies, but I found it interesting to figure out how that company's program operated. Most people would probably just sacrifice the $7 and have the rest of the day to do something else!
