What is "effective tax rate" for an individual filing a tax return?

Depends on how much you make.

From Wiki

"Effective tax rate" has different meanings in different contexts, but it is not "marginal tax rate," which is what the table above seems to focus on.

I think the meaning of "effective tax rate" in common parlance (versus the various technical definitions the accountants could provide) would be best described as the ratio of the total dollars paid in taxes over gross income.

The idea is to provide a measure of the percentage of total income -- before deductions and adjustments -- that goes to pay taxes. In some cases, the term may be used to apply only to income taxes; in others, it may be used to capture all state, local and federal taxes, including property taxes, sales taxes, etc.

But, I'm no accountant or tax lawyer. Perhaps, some real experts can define "effective tax rate" for us.

^ with the money you seem to have to spend on gear, you might want to use an actual accountant rather than the block. Kinda like not paying for insurance when shipping stuff... stuff happens.

Effective tax rate is simple. Take your total income, subtract your deductions, to figure your total taxable income. Then you find out how much you owe in taxes, social security and medicare don't count, but state taxes due, except sales tax. Find the percentage of money owed to taxes, and you have the effective tax rate. Forgot one, property taxes, and various fees to whatever don't count also.

If you take into account all taxes, fees, and price mark ups to every item you purchase, you'll find that you're paying north of 40% in taxes, but only taxes on income collected by state and federal government counts toward effective rate, because it sounds better.

rpf65 wrote: »

Effective tax rate is simple. Take your total income, subtract your deductions, to figure your total taxable income. Then you find out how much you owe in taxes, social security and medicare don't count, but state taxes due, except sales tax. Find the percentage of money owed to taxes, and you have the effective tax rate. Forgot one, property taxes, and various fees to whatever don't count also.

If you take into account all taxes, fees, and price mark ups to every item you purchase, you'll find that you're paying north of 40% in taxes, but only taxes on income collected by state and federal government counts toward effective rate, because it sounds better.

Yep...."sounds better" is another word for manipulated. Take inflation numbers for example. What 2 things are the most inflationary ? Food and gas prices....but those are conveniently left out of inflation numbers. Same with unemployment numbers...pretty much any info coming out of a governments mouth has been white washed, manipulated, twisted to present the narrative they wish to portray.

Guys,

Best advice I can give you during tax season is to stop doing them yourself. Stop using Turbo tax, and your brother who knows a guy. Have a professional do them, they will save you tons of dough. That's if you have deductions....if your just filing a simple return with no deductions then you can do those yourself.

It's a bit overly simplistic to say stop doing them yourself, stop using turbo tax. Some of us simply make W-2 income, and don't have any fancy deductions beyond mortgage interest, state and local taxes, and charitable deductions. I've talked to professionals, they've told me there's nothing (legal...) that they can do for me that Turbo Tax can't. If you own your own business, different story, but there are plenty of us for whom Turbo Tax does a very good job.

I pay a CPA firm every year. Sense the divorce and alimony have started I've been seeing green every February or March.
Alimony is 100% deductible! Can we say silver lining!!?? When I get all my doc's they go asap to be done. I avoid all this now that the x isn't involved.