What is effective tax rate?

Effective tax rate is your total tax divided by your total income, expressed as a percentage. It represents the average rate you pay across all income, considering progressive brackets, deductions, and credits. It's always lower than your marginal rate.

How is effective rate different from marginal rate?

Marginal rate is the tax on your last dollar earned (your highest bracket). Effective rate is the average across all income. For example, you might be in the 24% bracket (marginal) but pay only 15% overall (effective) because lower portions are taxed at lower rates.

What's a typical effective tax rate?

According to IRS data, the average effective federal income tax rate is about 13-14% for all taxpayers. High earners pay 20-25% effective rates, while middle-income households typically pay 8-15%. This doesn't include state, FICA, or other taxes.

Effective Tax Rate Calculator - Free Tax Calculator

How to Use the Effective Tax Rate Calculator

This free effective tax rate calculator helps you quickly calculate effective tax rate. Simply enter your values in the fields above and click "Calculate" to see your results instantly.

Understanding Your Results

After entering your information, the calculator will display your results including effective tax rate, marginal tax rate, after-tax income, marginal vs effective gap. Each result is calculated using standard formulas used by financial professionals and experts in the field.

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