Your 2023 effective tax rate

[grasshopper]

I know it's early in the tax season. My effective tax rate according to TT is 5.21%.

Includes SS, RMD and roth conversion.

 

[FrankiesGirl]

0.04%

I've had it be negative in the past tho.

This is including dividends, RMD from an inherited IRA and a LTCG harvest at EOY.

 

[FLSUnFIRE]

-26% of my AGI. It won't last but for now I'm going to savor it.

 

[frayne]

A little over 4%.

 

[mrfeh]

Really need to define how you want people to calculate it, if you want non-conflicting answers, such as line x / line y on your 1040.

I was gonna say 0%, but we got a small amount back in ACA subsidies, so I suppose it's slightly negative.

 

[USGrant1962]

Really need to define how you want people to calculate it, if you want non-conflicting answers, such as line x / line y on your 1040.

I was gonna say 0%, but we got a small amount back in ACA subsidies, so I suppose it's slightly negative.

Yes, I don't use TT so what is their formula?

 

[latexman]

17.5%.

 

[Out-to-Lunch]

I haven't filed yet, but TT says it is 3.08%.

I did a fair amount of tax-gain harvesting in 2023, and I strove to keep my income below the 15% cap gains bracket. I even had to make some contributions to a tIRA in order to counter the interest earned.

 

[N02L84ER]

1.65%

 

[audreyh1]

I always compared total taxes owed after credits against AGI. TurboTax generally calculated a lower number. Maybe they included tax-exempt interest.

 

[scrinch]

Fed: 18.1%
State: 7.3%

 

[Koolau]

Probably about same as '22 or 12%.

 

[grasshopper]

Really need to define how you want people to calculate it, if you want non-conflicting answers, such as line x / line y on your 1040.

I was gonna say 0%, but we got a small amount back in ACA subsidies, so I suppose it's slightly negative.

LINE 24 TOTAL TAX divided by LINE 11 ADJUSTED GROSS INCOME.

 

[FLSUnFIRE]

LINE 24 TOTAL TAX divided by LINE 11 ADJUSTED GROSS INCOME.

But then anyone self-employed is including SE taxes but anyone salaried is not including FICA taken by their employer so still apples to potatoes.

 

[mrfeh]

LINE 24 TOTAL TAX divided by LINE 11 ADJUSTED GROSS INCOME.

FWIW, this is not how TT calculates it.

As an example, for somebody who is self-employed, their FICA will be included on line 24, whereas somebody that receives a W2 (and also paid that tax, but had it taken out of their paycheck), it will not be.

 

[CardsFan]

TT says 4%.

Last year I sold some mutual funds, took the gains, and re-positioned into ETFs to eliminate future cap gains distributions. So I did not do a Roth conversion.

Next year it will be back to 12% to 15% with conversions.

 

[Lakedog]

14.5%

 

[Willers]

4.27% Federal
-1.10% State (thank you Tabor)

 

[misanman]

According to TurboTax

Federal: 7.51%
State: .4% (Michigan)

Filed yesterday afternoon and returns were accepted over night.

 

[Midpack]

Down to 10.98% per TT thanks to a big one time credit.

 

[jollystomper]

Using the Investopedia formula: https://www.investopedia.com/terms/e/effectivetaxrate.asp:

For an Individual ETR = Total Tax ÷ Taxable Income

So if you want to calculate your effective tax rate, here's how you do it:

An individual can calculate their effective tax rate by looking at their Form 1040 and dividing the total tax, which is the number found on line 24, by the taxable income figure found on line 15 and multiplying the result by 100.

11.5%

Using the calculation some have mentioned (total tax on line 24 divided by AGI on line 11):

8.7%.

 

[target2019]

I'm a good guesser. It's gonna be less than my one-guess-fits-all estimate this year - 15% for Fed + NJ.

In the next two years I can get that down to 12% combined. Maybe. I don't know. Depends on what I wanna do.

 

[brett]

14.46 for me. 17.51 for my spouse. Combined.

We file separately.

 

[mrfeh]

I was gonna say 0%, but we got a small amount back in ACA subsidies, so I suppose it's slightly negative.

Turbotax says -.3%

 

[audreyh1]

I pretty much use line 14 adjusted AGI divided by total taxes owed, but I probably should use gross AGI + tax-exempt interest as my denominator.