Poll: Your 2021 Taxes Federal Tax Rate

[rk911]

effective tax rate for 2021 is 9.72%

 

[athena53]

According to Turbotax, the number is 11.37%.

But if I add in the IRMAA that I also have to transfer from my pocket to Uncle Sam's this year, the number is 16.9%.

Interesting adjustment- that would raise mine from 3.96% to 7.34%. Big difference.

 

[Surewhitey]

Managing my income for ACA purposes, so zero tax rate. Converted Roth up to 12% for the DGF.

So, does the Roth conversion count negatively for ACA purposes? I think I know, just curious to confirm...

 

[nap470]

TT says 11.29% for us.

 

[SecondCor521]

So, does the Roth conversion count negatively for ACA purposes? I think I know, just curious to confirm...

Roth conversions are included in AGI and therefore in ACA MAGI.

 

[Surewhitey]

Using this formula ours is 15.5%

13.6% for us. But I'm self employed paying a penalty for this... We're in the 24% but max out 401ks and HSA to reduce most of the 24% bracket...

 

[11522914]

0%. We aren't poor. We just like to look that way to the taxing authorities.
If I plan well it should be 0% again this year.

Same here [emoji16]

 

[Midpack]

How does anyone have an effective tax rate of over 35%?

 

[RobbieB]

I clocked in at 14%.

 

[Al in Ohio]

8.34% effective fed tax rate which is 3% higher than last year due to ROTH conversions.

 

[Al in Ohio]

So, does the Roth conversion count negatively for ACA purposes? I think I know, just curious to confirm...

I’m doing them now so as to keep my magi low and maximize my ACA subsidies before age 65.

 

[Act2]

17%

 

[Sunset]

For the Feds, ours was 10.6%

I failed to do enough Roth Conversions, as was afraid of going over the IRMMA line.
Trying to get better handle on our yearly income amounts.

 

[Landolink]

3.38% effective tax rate

 

[srblanco7]

20.5% effective tax rate.

 

[Midpack]

For the Feds, ours was 10.6%

I failed to do enough Roth Conversions, as was afraid of going over the IRMMA line.
Trying to get better handle on our yearly income amounts.

It took me a year to dial in the IRMAA threshold, and it doesn’t help that we don’t know the limit until very late in the year. So I target just inside the prior year limit, if they ever reduce the limit, I’m hosed…

 

[pb4uski]

0%. We aren't poor. We just like to look that way to the taxing authorities.
If I plan well it should be 0% again this year.

0% might not be good.

I was talking with BIL the other night. He is 0% but is worried about RMDs. It turns out that he has headroom to either withdraw or Roth convert tax-deferred money and fill up his standard deduction so pay no tax on the withdrawal/conversion but is not doing so.

That's a no brainer.

 

[pb4uski]

Interesting adjustment- that would raise mine from 3.96% to 7.34%. Big difference.

True, but is it really a tax or more that Medicare Part B and Part D premiums have an element of income scaling built into them.

The non-profit dental group that I used to go to scaled their rates for income. Of course, I paid the full freight but their lower income clients paid less for the same services. I never thought of that as a tax.

 

[pb4uski]

How does anyone have an effective tax rate of over 35%?

Looks like those effective rates are a tad high, even for a single. Using https://www.irscalculators.com/tax-calculator for 2021 for a single with $100,000 of ordinary income I get 15.01% and for $200,000 of ordinary income I get 20.04%.

 

[TheWizard]

My ratio of federal income tax to AGI was 18.6% for 2021, my ninth year of retirement.

I have a small spreadsheet that I've been updating annually with my income and tax numbers, going back 15 years or so.
2021 was my highest Federal tax paid year ever and I expect future years to be inching up even higher...

 

[USGrant1962]

Looks like those effective rates are a tad high, even for a single. Using https://www.irscalculators.com/tax-calculator for 2021 for a single with $100,000 of ordinary income I get 15.01% and for $200,000 of ordinary income I get 20.04%.

Nice website to play with for quick and dirty estimates. To get to 35% effective a single would need approximately:

$800,000 in wages, or
$650,000 in SE income (including SE tax)
$850,000 of bond interest (including NIIT), so a ~$35M portfolio all in bonds?

Capital gains never gets close to 35% effective and of course the numbers are higher for MFJ.

$650K to $1M is not extremely rare for docs, Megacorp execs, and self-employed business owners so a few >35% responses seem right for the still-employed in this crowd. >35% would be rare for retirees living off pensions, SS and portfolios, though.

 

[BruinBones]

Earned Income = $153,863.
(AGI = $150,168)
(Taxable Income = $119,492).
Tax = $19,567.
Tax/Earned Income = 19567/153863 = 12.7%

 

[CincyDave]

I don't know how Turbo Tax calculates effective tax rate. The summary page of the turbo tax print out shows the effective tax rate as 13.9%. If I take total tax / Adjusted gross income it comes to 15.2% and if I take total tax / taxable income it comes to 16.3%. Color me confused.

 

[ArmchairMillionaire23]

We paid $0 in taxes in 2021 due to contributing around 50% of my salary into 401(k), maxing out two IRAs and HSAs, a carryover capitol loss, and the savings credit. Our tax bracket was 12%.

Zero divided by anything (other than zero) is still zero, right?

 

[GLM]

One more ACA year

.19%. We played the game well this year... And managed income one more year for the ACA.

In 2023 I go on Medicare with DH in the rules change.