Poll: Your "average" federal tax rate FY 2024

[pjigar]

Now I get this picture of the (currently 8) group of us under 60s huddled together in the 0% range with a little sign that says "Will keep MAGI low for ACA" and a tin cup out. The 30% people walking by, keeping a comfortable distance, but dropping a coin in our cup.

I would do it if I could. It's a law and there is nothing wrong with taking advantage of all available tax breaks legally.

 

[Fermion]

I would do it if I could. It's a law and there is nothing wrong with taking advantage of all available tax breaks legally.

Oh, 100% yes. There are many things that are fair to some and not so fair to others. Even the recent WEP/GPO thing is unfair to someone who has 35+ years paying into SS with many of those years getting their benefits reduced by 60% compared to someone else getting SS and a pension. We only paid in about 26 years before retiring so are a bit closer to the 90% bend, more like the WEP people.

 

[audreyh1]

13.6% calculated according to the OP.

TurboTax has it as 12.8%, but I never get how they calculate it. Even if I add the tax exempt income to the AGI I still get 13.4%.

 

[sengsational]

Last time this topic was discussed I suggested that the simple definition wasn't helpful because I really want to know my total interaction with the US Treasury, not a subset of it. If you don't include credits, then it's a subset. The following post links to an older post, same topic. Lots of historical reading for those with more than a passing interest.

Poll: Your 2021 Taxes Federal Tax Rate

Since it is now close to tax due date for 2021 taxes, thought it would be interesting to see what your effective federal tax rate is for 2021 taxes. Just your overall percentage after all the various calculations. I haven't seen a thread on this for 2021 tax year. State tax rate not applicable...

www.early-retirement.org

 

[braumeister]

I've kept track of it almost all my life, and also find it interesting. Using the OP's definition, it has been as high as 25% and as low as 10% so a lot of variation over the years. Last year was 12.1% but I expect this year to be less.

 

[Dash man]

Haven’t done my taxes yet, but expect about 22-24% due to Roth conversions. We’re waiting to see if the tax rates get extended before we do anymore conversions this year, besides the one we did in January. If they extend them, we’ll stretch out more conversions. If they expire, we may do another large conversion this year.

 

[jebmke]

Haven’t done my taxes yet, but expect about 22-24% due to Roth conversions. We’re waiting to see if the tax rates get extended before we do anymore conversions this year, besides the one we did in January. If they extend them, we’ll stretch out more conversions. If they expire, we may do another large conversion this year.

seems like you'd have to be converting well into the top bracket to drive your effective tax rate into the low-20s

 

[Dash man]

seems like you'd have to be converting well into the top bracket to drive your effective tax rate into the low-20s

Yes, we’ve been doing large Roth conversions the past few years.

 

[UpQuark]

Might be interesting to see a poll that is separate for pre- and post-RMD age.

 

[Jerry1]

According to turbo tax, my effective tax rate is 13.61%

 

[Koolau]

11.7%

 

[Koolau]

Single guy - Zero taxes. I would love to trade with you.

Heh, heh, some problems are better than others.

 

[523HRR]

TurboTax has it as 12.8%, but I never get how they calculate it. Even if I add the tax exempt income to the AGI I still get 13.4%.

Effective Tax Rate Calculated by TurboTax:

Line 22 Tax Before Other Taxes DIVIDED BY
Line 11 Adjusted Gross Income (AGI)

Not how I would calculate it, but whatever.

 

[Midpack]

Interesting, a well heeled group all in all. Not surprising.

 

[TheWizard]

Filing single with an AGI around $200k this year, I paid a bit over $36k federal tax, so a bit over 18%.
$16k of my AGI was Roth conversion, in the 24% bracket, so I'm fine with that.
My numbers have been similar, increasing slightly over the past decade of retirement and I expect them to continue about the same...

 

[audreyh1]

Effective Tax Rate Calculated by TurboTax:

Line 22 Tax Before Other Taxes DIVIDED BY
Line 11 Adjusted Gross Income (AGI)

Not how I would calculate it, but whatever.

Yeah, I think I figured that our once but forgot.

 

[wallygator69]

I would do it if I could. It's a law and there is nothing wrong with taking advantage of all available tax breaks legally.

We owed $5.00 fed and no state tax so I cheated and voted exactly zero. DO not hate me because I am beautiful.... LoL

DW is embarrassed/little angry when i am honest and say Obama Care when it comes up....We did not use OC the first 2 years and were paying about $12k with a huge deductible, Think it was $10,000....

 

[sdawson]

Pre Retirement here (this is my last year)

Fed Effective Tax rate 2024 : 16.1%
Oregon State Tax rate 2024 : 8.2%

This is my last year of work (unless 2008 happens again). So next year will be the same. Will have to check back in two years to see what that is in retirement.

Actually, it will be high at the beginning of retirement due to perhaps four years of Roth Conversions I am considering.

 

[38Chevy454]

Federal: Tax Due / 1040 Line 11 AGI = 12.51%
OH State: Tax Due / 1040 Line 11 AGI = 2.18%

Ohio has a different AGI due to OH state credits. If I use the OH AGI: 2.54% effective rate

 

[athena53]

5%- surprising but I give generously to charity (about 1/3 of my Adjusted Gross) so my itemized deductions are very high.

 

[athena53]

FWIW I was expecting double bell curve in the poll results: First bell for retired people and another bell for working people (which is what it looks like so far). I was surprised to see many huddled into 0% range, many be ACA effect.

Not in my case. Never was able to manage my AGI to get ACA subsidies in the 4 years between retirement and Medicare because of $1,800/month in pensions, investment gains in the after-tax accounts and (later) Survivor benefits from SS.

What's pushing me up besides tax rates for singles is having to pull RMDs and collect SS at the same time. No pension, but not complaining.

Yeah, that will be a killer for me next year. I can take some of my RMD as QCDs but of course that's offset by lower itemized deductions.

 

[pb4uski]

We owed $5.00 fed and no state tax so I cheated and voted exactly zero. DO not hate me because I am beautiful.... LoL

DW is embarrassed/little angry when i am honest and say Obama Care when it comes up....We did not use OC the first 2 years and were paying about $12k with a huge deductible, Think it was $10,000....

What you owed is different from this poll. The poll is on tax. I overpaid and got a refund (negative "owed"), but I still incurred and paid tax.

If what you mean is that your tax was $5, then you may be leaving some headroom in the 10% and 12% brackets going to waste.

 

[RetMD21]

I think we pay way too much but is is still < 12%. Qualified dividends and capital gains are helping

 

[Ronstar]

Well my line 22 / line 11 is 6.3%, but the tax summary page says 8.7%. Not sure where the tax preparer got that.

 

[TheWizard]

seems like you'd have to be converting well into the top bracket to drive your effective tax rate into the low-20s

Top Federal tax bracket is 37%, but don't have to go that high to get effective rate over 20%.
Top of 32% bracket/bottom of 35% bracket is an AGI of approximately $517k, MFJ, with a tax around $111k which is 21.5%.

But that's assuming all Ordinary Income. If a lot of that income was from Qualified Dividends, the tax and effective rate would be less...