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Your 2023 effective tax rate
Old 02-14-2024, 02:53 PM   #1
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Your 2023 effective tax rate

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.
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Old 02-14-2024, 02:57 PM   #2
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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.
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Old 02-14-2024, 03:03 PM   #3
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-26% of my AGI. It won't last but for now I'm going to savor it.
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Old 02-14-2024, 06:50 PM   #4
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A little over 4%.
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Old 02-14-2024, 07:46 PM   #5
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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.
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Old 02-14-2024, 08:19 PM   #6
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Quote:
Originally Posted by mrfeh View Post
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?
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Old 02-14-2024, 09:03 PM   #7
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Old 02-14-2024, 09:04 PM   #8
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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.
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Old 02-14-2024, 10:20 PM   #9
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Old 02-14-2024, 10:24 PM   #10
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I always compared total taxes owed after credits against AGI. TurboTax generally calculated a lower number. Maybe they included tax-exempt interest.
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Old 02-15-2024, 12:05 AM   #11
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Old 02-15-2024, 01:55 AM   #12
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Probably about same as '22 or 12%.
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Old 02-15-2024, 04:30 AM   #13
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Quote:
Originally Posted by mrfeh View Post
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.
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Old 02-15-2024, 04:42 AM   #14
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Originally Posted by grasshopper View Post
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.
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Old 02-15-2024, 04:47 AM   #15
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Originally Posted by grasshopper View Post
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.
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Old 02-15-2024, 05:40 AM   #16
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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.
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Old 02-15-2024, 06:37 AM   #17
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Old 02-15-2024, 06:51 AM   #18
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Old 02-15-2024, 07:10 AM   #19
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According to TurboTax

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

Filed yesterday afternoon and returns were accepted over night.
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Old 02-15-2024, 07:22 AM   #20
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Down to 10.98% per TT thanks to a big one time credit.
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