Where do I find my effective tax rate on my completed return?

[Devin · Accepted solution]

"Effective tax rate" is not something that will appear on your tax return, and there's actually not a single definition of what it is. Essentially, effective tax rate is just the average tax rate you pay on all of your income.

There's multiple ways you can calculate this number, depending on which effective tax rate you're interested in. If you want to know your effective tax rate on only your "taxable income" (i.e. your income after all adjustments, deductions, and exemptions), then just divide your total tax (Line 61 of Form 1040) by your taxable income (Line 43 of Form 1040). If you're interested in the effective tax rate on all of your income (even the income you don't pay any tax on because of deductions, etc.), then divide your total tax by your total income (Line 22 of Form 1040).

You can also choose different lines for income (maybe you want Adjusted Gross Income on line 37, or maybe you want to add in even non-taxable income from tax exempt interest or social security benefits) and different lines for the tax (maybe you don't want to include penalties or self-employment tax from the "Other Taxes" section). But basically it's just your taxes paid -- under whatever definition of taxes paid you want to use -- divided by your income -- under whatever definition of income you want to use.

[bob33]

This mostly answered my question, but I had seen it calculated for me as I was going through the TurboTax process (it showed up on one of the screens, not my return), and I was looking for that.

[Devin]

Ah, OK. I'm not sure which screen specifically you're talking about, but I do find some notes in the program that discuss how we do the effective tax rate calculation (in at least one location in the program anyway). It looks like we use Adjusted Gross Income as the income for this calculation (line 37 of Form 1040). However, the tax being used is kind of a hodge-podge of some taxes but not others. For example, we subtract the earned income credit that shows up in the Payments section of Form 1040 -- so you could wind up with negative tax and a negative effective tax rate...on the other hand we don't include alternative minimum tax, so if you pay significant AMT the effective rate might look a little lower than what you're expecting.

Since it's not a specific term, and just a tool for getting a rough idea of how much tax you're paying "on average" on your income, you can get a reasonable estimate by just dividing the line 61 total tax by your line 37 AGI.

[gndavisjr]

The summary used to show a turbotax calculated effective tax rate.  There is no longer a summary that I can find.

[cjsaper]

I have the same question. TurboTax used to list the “effective tax rate” and now it does not appear to list it in the tax summary. I wish TurboTax would add that back in to the program or tell us where it now appears.

[javillel]

I agree, this needs to be added back. Why would we have to do the math when the figure are all there.

[scottamuggli]

I also vote for returning this feature. It allows a quick apples to apples comparison year over year. Now I will need to download my old returns and create a spreadsheet myself.

[Bjarni Magnusson]

Devin- thank you. I am not seeing a line 61 on my 1040 for 2019 1040. It appears to me that line 19 ("Add lines 17 and 18e. These are your total payments") is what you are referring to as taxes paid. Is that correct? 

[DawnC]

Even though Devin's answer is dated in 2019, it is actually much older (there was a merging of 2 websites done last year) and he is referencing an older version of a 1040 tax forms.   You can find your effective tax rate at the bottom of your 2-year comparison.  It is also stated on the TurboTax Filing Instructions page which is included when you print a copy of your return.  

An individual can calculate their effective tax rate by looking at their Form 1040 and dividing the number on line 16, the "Total Tax," by the number on line 11(b), the "Taxable Income." 

@Bjarni Magnusson

[Bjarni Magnusson]

Thank you dawn! 

[Bjarni Magnusson]

@DawnC  where do i find the 2 year comparison? I have tried for a little while and can't say that it is very intuitive to get to- that or i'm just completely missing something 

[Sheila 2]

I moved some money from Trad.IRA to Roth IRA during 2020.

I'm doing an amended tax return.  How do I find out the

effective tax rate for $2000?

[sdobslawZ]

Doing my 2021 taxes the summary page shows an Effective Tax Rate of -39.99%. How is that possible?. My taxable income is $0 and Total Tax is also 0.

[FangxiaL]

It means that you received refundable credit such as the new child tax credit and earned income credit.