Your 2023 effective tax rate

[Born2Fish]

1.3%.

 

[ShokWaveRider]

16.5%

 

[Dash man]

Finally finished our taxes! Effective tax rate of 7.55%.
I can guarantee it won’t be that low for 2024.

 

[joesxm3]

I came in around 5% this year thanks to my EV tax credit. I think I might have been around 15% without it.

 

[TOOLMAN]

18.7% Federal

 

[Zona]

TT says 9.4% effective tax rate for Fed, the lowest it has ever been (usually around 12-16% the past few years). For state it was 0.7% thanks to some charitable contributions and education gifts that give a credit in my state. If you don't count the credits, it would have been more like 1.9%.

We are retired and our income last year was mostly a big Roth conversion, long-term cap gains, interest (including iBond interest), and taxable divs (mostly qualified).

 

[Winemaker]

15.3

 

[Surewhitey]

17.3% federal, same as last year. DW is upset for taxes going up $5k this year. I remind her of why...

 

[FlaMariner]

8.05%

 

[Digger1000]

I paid $0 in both Fed and state.

 

[kgtest]

I paid $0 in both Fed and state.

Way to go! I feel like that is an accomplishment when you can accomplish that from time to time. If you end up NEVER paying federal tax...I want to hangout with you on the weekend on your yacht in Barbados, please adopt me!

You got me beat, but not by a lot. I have a creative accountant

 

[pacergal]

Effective tax rate
Fed: 14.7%
State: 8.2%

 

[tominboise]

Fed = -1.7% State = 3.7%

I need to do more Roth conversions this year.

 

[xlf11]

Fed: 7.53%/ State: 1.58%

 

[foxfirev5]

Fed 7.4% State 1.2%. This year the state should shrink further to less than .2% due to the phase out of retirement income tax in Michigan.

 

[Souschef]

Federal 11.4%

 

[socca]

TurboTax:
• Me: 21%
• Relative: 23%
2024 should be lower for me unless we sell another biz.

 

[Whisper66]

FWIW - our Fed effective tax rate was 22% with 85% of our "income" coming from IRA required distributions and conversions.

 

[Pointby2]

This year we had no income and didn't prepay anything. We got a $3,267 refund from the Feds and owe CA $0.
We kept our income low to qualify for ACA benefits but maybe I overdid it.

 

[Gumby]

This year we had no income and didn't prepay anything. We got a $3,267 refund from the Feds and owe CA $0.
We kept our income low to qualify for ACA benefits but maybe I overdid it.

I would be very concerned about that, because you do not qualify for the ACA if your Adjusted Gross Income is less than the Federal Poverty Level (which was $18,310 for a family of two in 2023 or $25,268 if your state is an "expanded Medicaid" state). You would be required to go on Medicaid instead.

 

[Fermion]

I would be very concerned about that, because you do not qualify for the ACA if your Adjusted Gross Income is less than the Federal Poverty Level (which was $18,310 for a family of two in 2023 or $25,268 if your state is an "expanded Medicaid" state). You would be required to go on Medicaid instead.

I am/was also concerned with this and I try to always be a few dollars above 138% FPL, but I am not sure there is any repayment required if you fell under FPL. I think someone might be able to accuse a person of fraud if they did it consistently for a number of years, but I have my doubts that any court would approve of going after a person who failed to generate enough income to qualify for health insurance on a one time basis.

 

[homestead]

I would be very concerned about that, because you do not qualify for the ACA if your Adjusted Gross Income is less than the Federal Poverty Level (which was $18,310 for a family of two in 2023 or $25,268 if your state is an "expanded Medicaid" state). You would be required to go on Medicaid instead.

The first time I applied for ACA I included a large distribution as my income the first month of the year and but they looked at all the other months with low income and put me on medicaid even though my yearly income was sufficient.
If I had done a monthly draw I would have been ok. I called them and canceled medicaid and went with a high deductible non-ACA plan.

 

[AZsniper]

13.8

2024 will be my last high income year and that number should come down!

 

[skyking1]

Line 24 / line 11 = ~12.5%
This is also our last high year, my income will be about 75% this year.

 

[Closet_Gamer]

Still waiting for the tax team to send me the total damage. Will share. It won’t be pretty.

Each year I also calculate my taxes/net worth.

I find this an interesting metric and it shows me how effectively I am keeping the tax man at bay in terms of really dragging my wealth creation. You can have a big % of income go to the tax man, but if you are growing assets in tax deferred structures and being tax efficient in your brokerage accounts, you can still grow wealth quickly.