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View Poll Results: What was your EFFECTIVE tax rate for 2015?
Less than 10% 32 28.32%
Between 10% and 20% 47 41.59%
Between 20% and 25% 13 11.50%
Over 25% 21 18.58%
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What is Your Effective Tax Rate?
Old 03-05-2016, 02:16 PM   #1
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What is Your Effective Tax Rate?

Have you finished your 2015 taxes yet? If so, I'm curious what the group's effective rate ended up this year. TurboTax calculates it as part of the summary.
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Old 03-05-2016, 02:21 PM   #2
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you might consider breaking the poll choice ranges more finely, perhaps 5% each
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Old 03-05-2016, 02:23 PM   #3
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Mine says 7.88% but it is somewhat misleading because it doesn't include the 7.65% "employer" portion of the self-employment tax DW has paid as an ordained pastor since last July. In reality, in 2016 we expect self-employment tax to be more than 2/3 of the total tax we pay (both income taxes on earned income and quarterly payments for SE taxes).
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Old 03-05-2016, 02:29 PM   #4
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How does TT calculate effective rate? It looks like, from this, people were thinking that at least for 2014, it was whacked.
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Old 03-05-2016, 02:45 PM   #5
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Here's how I calculated it (H&R Block doesn't calculate it for me):

( (Line 63 [total tax]) - (Sum of lines 67 through 73 [credits]) - (Form 8962 line 25 [APTC])) / (Line 38 [AGI])

My effective rate was -32.8% (meaning they paid me 32.8% of what's on line 38).

So yeah, I voted "less than 10%"

Edit: Updated with Advance PTC.
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Old 03-05-2016, 02:48 PM   #6
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My effective tax rate, including state taxes to both states (we moved mid-2015) was 14%.

TurboTax seems to only calculate the effective rate for Federal taxes, not the combined rate.
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Old 03-05-2016, 02:53 PM   #7
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TT doesn't include your non-taxable income either?
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Old 03-05-2016, 03:12 PM   #8
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8.25%, got it by dividing actual tax liability by taxable income. My marginal rate is 15%.
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Old 03-05-2016, 03:21 PM   #9
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I divided what I paid in Fed tax and state tax by my total income (before standard deductions) and came up with 16%.
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Old 03-05-2016, 03:21 PM   #10
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16.3% via
line 44 (tax) divided by line 22 (total income)


18.9% via Frane's method below
line 63 (total tax) divided by line 43 (taxable income )



Was near the top of the 25% bracket this year with Roth Conversions.


ed: Adding in State Income tax would take the ratio rate up to 20.2% I will leave my vote as it is (10-20% range)

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Old 03-05-2016, 03:33 PM   #11
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I think we need some standardization as many are doing it differently. My understanding is your effective rate is your tax liability (actual tax due) divided by taxable income (income after standard/itemized deduction and exemptions,etc.) not AGI. To be even more specific Form 1040 line 63 divided by line 43. For the sake of simplicity could we keep it just on the federal returns ?
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Old 03-05-2016, 04:02 PM   #12
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Using your definition (Line 43/Line 63), mine was 15.6%. Being single with a pension is not so good with respect to fed taxes. At least no state taxes for me.
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Old 03-05-2016, 04:10 PM   #13
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OK, using that definition I get 16%.

But in my own records I've always used total income (Line 22) instead of taxable income to calculate my effective rate.

I'm always amused at how any mathematical question posed here tends to generate 17 different ways of manipulating the numbers.
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Old 03-05-2016, 04:11 PM   #14
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Old 03-05-2016, 04:48 PM   #15
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In 2015, the gap between my federal AGI and federal TI was larger than in previous years as an early retiree because of a large medical expense deduction. Therefore, the gap between my effective tax rate using AGI in the denominator and using TI in the denominator is also a little bigger than in other recent years as an early retiree (on a percentage basis). Using AGI, the ETR was only 1.3% of AGI but 2.1% of TI. Both are all-time lows. And for the third straight year, my federal taxes due are lower than my state taxes due.
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Old 03-05-2016, 05:08 PM   #16
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Quote:
Originally Posted by mickeyd View Post
Have you finished your 2015 taxes yet? If so, I'm curious what the group's effective rate ended up this year. TurboTax calculates it as part of the summary.
10% using the effective tax rate listed in TurboTax's summary.
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Old 03-05-2016, 06:20 PM   #17
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Quote:
Originally Posted by frayne View Post
I think we need some standardization as many are doing it differently. My understanding is your effective rate is your tax liability (actual tax due) divided by taxable income (income after standard/itemized deduction and exemptions,etc.) not AGI. To be even more specific Form 1040 line 63 divided by line 43. For the sake of simplicity could we keep it just on the federal returns ?
I thought that was how TT calculated it.
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Old 03-05-2016, 06:33 PM   #18
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0.014% federal AGI
0.027% federal taxable income
0.273% federal + state total income


less than 0% if I include PTC.
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Old 03-05-2016, 09:36 PM   #19
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Quote:
Originally Posted by sengsational View Post
How does TT calculate effective rate? It looks like, from this, people were thinking that at least for 2014, it was whacked.
Total tax/Line 63 divided by Total income/Line 22. That computation agree with the numbers in my return but I don't have SE tax.

Mine is 6.82% for 2015, and my state tax rate is 2.91% for a combined rate of 9.73%
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Old 03-06-2016, 08:01 AM   #20
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Per TT: 29% -- so more like 36% if you incl city and state.

I'm still in the accumulation phase and it was a good year.

While the % and absolute made me absolutely cringe DW reminded me how fortunate we are and that lots of people would be delighted to have this "problem."

As a wise man once told me "You only pay taxes when good things happen."

Would still like some of my money back tho!! ��
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