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Effective Tax Rate Calc

 

(@diehl228)
New Member Customer
Joined: 2 years ago
Posts: 1
Topic starter  

The Effective Tax Rate (Tabular Projections/Taxes) does not seem to match what I expected.

Is the Effective Tax rate just for the Federal, or is it intended to be the combination of both Federal & State?

Also would like to see the method being used. Is it Tax $/AGI, or Tax $/Taxable Income. I've tried calculating it both ways and neither match the Effective rate displayed.

Thanks,

--Jim D.


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(@smatthews51)
Member Admin
Joined: 2 years ago
Posts: 380
 

Effective tax rate is ALL TAXES / ALL INCOME. So, all taxes includes federal, state, AMT, and FICA. All income includes all income from the Income page, all sources of long-term capital gains, RMD's, etc.

Stuart


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(@hines202)
Estimable Member Customer
Joined: 2 years ago
Posts: 184
 

Circling back on this, as I'm seeing tabulars where effective tax rate is higher than marginal. That's happening because per above, effective factors in all taxes, fed, state, AMT, FICA, etc whereas the column for marginal tax rate is the top federal bracket used?


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(@smatthews51)
Member Admin
Joined: 2 years ago
Posts: 380
 

@hines202 Yes, that's correct.


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