Join Early Retirement Today
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%
Voters: 113. You may not vote on this poll

Reply
 
Thread Tools Display Modes
What is Your Effective Tax Rate?
Old 03-05-2016, 01:16 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,671
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.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-05-2016, 01:21 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 3,877
you might consider breaking the poll choice ranges more finely, perhaps 5% each
GrayHare is offline   Reply With Quote
Old 03-05-2016, 01:23 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ziggy29's Avatar
 
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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).
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 03-05-2016, 01:29 PM   #4
Moderator
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 10,656
How does TT calculate effective rate? It looks like, from this, people were thinking that at least for 2014, it was whacked.
sengsational is offline   Reply With Quote
Old 03-05-2016, 01:45 PM   #5
Moderator
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 10,656
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.
sengsational is offline   Reply With Quote
Old 03-05-2016, 01:48 PM   #6
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,199
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.
braumeister is offline   Reply With Quote
Old 03-05-2016, 01:53 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,008
TT doesn't include your non-taxable income either?
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 03-05-2016, 02:12 PM   #8
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,878
8.25%, got it by dividing actual tax liability by taxable income. My marginal rate is 15%.
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
frayne is offline   Reply With Quote
Old 03-05-2016, 02:21 PM   #9
Recycles dryer sheets
arky's Avatar
 
Join Date: Jan 2012
Location: Colorado
Posts: 254
I divided what I paid in Fed tax and state tax by my total income (before standard deductions) and came up with 16%.
__________________
Don't you know that dynamite always blows down ? --- Moe to Curly
arky is offline   Reply With Quote
Old 03-05-2016, 02:21 PM   #10
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 3,594
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)

-gauss
gauss is offline   Reply With Quote
Old 03-05-2016, 02:33 PM   #11
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,878
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 ?
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
frayne is offline   Reply With Quote
Old 03-05-2016, 03:02 PM   #12
Full time employment: Posting here.
Lakedog's Avatar
 
Join Date: May 2007
Posts: 982
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.
Lakedog is offline   Reply With Quote
Old 03-05-2016, 03:10 PM   #13
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,199
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.
braumeister is offline   Reply With Quote
Old 03-05-2016, 03:11 PM   #14
Recycles dryer sheets
 
Join Date: Oct 2015
Posts: 91
19.92
WOOHOO!!!!! I win!
No....wait..... :-/



This is your life....and it's ending one minute at a time.
Geld ist Freiheit is offline   Reply With Quote
Old 03-05-2016, 03:48 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 6,682
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.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 03-05-2016, 04:08 PM   #16
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 47,474
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.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.

Happily retired since 2009, at age 61. Best years of my life by far!
W2R is offline   Reply With Quote
Old 03-05-2016, 05:20 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,008
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.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 03-05-2016, 05:33 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Jul 2014
Location: Undisclosed
Posts: 1,237
0.014% federal AGI
0.027% federal taxable income
0.273% federal + state total income


less than 0% if I include PTC.
N02L84ER is offline   Reply With Quote
Old 03-05-2016, 08:36 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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%
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is online now   Reply With Quote
Old 03-06-2016, 07:01 AM   #20
Thinks s/he gets paid by the post
 
Join Date: Oct 2011
Location: Philadelphia
Posts: 1,372
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!! ��
__________________
Luck is when Preparation meets Opportunity.
FIRE'd 1/1/24
Closet_Gamer is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Is my effective tax rate in retirement estimate appropriate? nico08 FIRE and Money 14 01-26-2014 10:33 AM
capital gains: is there an effective tax rate? mrfeh FIRE and Money 33 07-23-2013 07:51 PM
Poll: What is your effective Federal income taxes paid / AGI rate? LOL! FIRE and Money 45 08-21-2012 09:22 AM
Tax Bracket vs. Effective rate ratface FIRE and Money 30 03-29-2009 09:16 AM
Heres a good one...whats your effective tax rate cute fuzzy bunny FIRE and Money 47 04-07-2006 12:10 PM

» Quick Links

 
All times are GMT -6. The time now is 03:26 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.