I'm curious - do you know your "effective tax rate"?

[TBF]

Well I had filed an extension and I finally sat down with all my papers today and ran TurboTax for 2010.

Our situation is: good income, rent home, lots of debt - particularly student loans, 2 dependents

We ended up taking the standard deduction.

At the end Turbo Tax told me our effective tax rate is 20.29%.

I wondered if anyone else noticed this, and what your actual tax rate is. It may be lower than you think ...

[ThomWV]

1. I used to calculate it every year when I did my taxes

Sure, I used to see what rate I was actually paying. I just took my total tax paid and divided by my gross income from all sources. Bingo, the effective tax rate pops up. I did not factor in "Payroll taxes" though, just income tax.

[TBF]

2. I would have no clue but Turbo Tax generates it for you - pretty handy.

Some folks (obviously mostly repubs) are so against higher taxes - but even in our situation with the debt I think we could pay a little more. And we are certainly not in the top 1% - you have to have assets of about $8M to be in that category.

So when President Obama says lets tax folks a little more - let those Bush tax cuts expire - I am with him 100% (and we all know I don't agree with him on all that much lately).

[sinkingfeeling]

3. Are you asking for total or just from federal income taxes?

[TBF]

5. Good question - I guess just federal but you could put state in the comments.

Here in Texas we have federal income taxes and local property taxes - we do not pay a state income tax.

[MilesColtrane]

7. Texas has a 6.25% state sales tax.

The IRS provides a calculator that can estimate what you paid in sales taxes last year.

http://www.irs.gov/individuals/article/0,,id=152421,00.html

[TBF]

9. Our area is a little over 8% - we must have local taxes on top of it. nt

[HappyMe]

4. I usually get a refund. nt

[dtexdem]

6. Don't go with IRS tables to answer this:

count in FICA, property tax, sales tax, and so on. And those in states with state income taxes, count those in, too.

And what we get is largely worth the price we pay -- but too much goes to welfare cheaters: by which I mean the wealthy.

[MilesColtrane]

8. 15.6%

...including state taxes.

[iris27]

10. Getting a refund isn't mutually exclusive from having an effective tax rate.

Not sure why that is a category?

[TBF]

14. Because I am not an economist -

I'm sure someone who knows what they are doing could set it up better. We just talk about these tax rates (in general terms, highest rates in the 50s being in the 90th% and now the highest rate is in the 30th% ... and I wondered if anyone actually pays that much).

[hfojvt]

11. 20% seems high, mine is currently 0%

unless you make over $160,000 a year. The average tax rate of people making between $159,000 and $380,000 a year is only 17.21%.

Unless you are measuring "effective tax rate" differently that taxes/income. http://journals.democraticunderground.com/hfojvt/169

[TBF]

13. Yes -

our income is high and we don't own a house or have enough other deductions to itemize.

[hfojvt]

12. What does a refund have to do with effective tax rate?

I didn't check. Mine is probably about -3.5%.

[slackmaster]

15. IIRC it was about 17.1% last year, will be lower this year due to solar energy credit

:hi:

[jpljr77]

16. 13%. $150k dual-income, file joint/married, 2 kids...

-- new(ish) mortgage (so lots of interest)
-- small amount of student loans, barely anything deductible
-- max out on 401(k)/403(b) contributions and on flex spending account (used to pay daycare)
-- wife is a public school teacher, so she spends a little on classroom stuff each year.

I think those are all of our deductions. We itemize, fwiw.

Oh, and less than 5% of total yearly income is dividend/interest, so that doesn't effectively lower our tax rate.