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Effective tax rate |
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Effective tax rate The net rate a taxpayer pays on income that includes all forms of taxes. It is calculated by dividing the total tax paid by taxable income. Effective tax rate. Your effective tax rate is the rate you actually pay on all of your taxable income. You find your annual effective rate by dividing the tax you paid in the year by your taxable income for the year. Your effective rate will always be lower than your marginal tax rate, which is the rate you pay on the income that falls into the highest tax bracket you reach. For example, if you file your federal tax return as a single taxpayer, had taxable income of $75,000, and paid $15,332 in federal income taxes, your federal marginal tax rate would be 28% but your effective rate would be 20.4%. That lower rate reflects the fact that you paid tax on portions of your income at the 10%, 15%, and 25% rates, as well as the final portion at 28%. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Ensco said achieving a global effective tax rate comparable to rivals was one reason for the move, along with improved access to both European institutional investors and its clients outside the depressed Another anomaly that occurs with indefinite-lived assets is an increase in the effective tax rate when the company has a full valuation allowance. Google, for instance, would have been hit with an effective tax rate of 45. |
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