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Education
Your effective tax rate will be a blend of rates applied to your income that falls within different ranges. The ranges are taxed at 10%, 12%, 22%, 24%, 32%, 35%, and 37%, depending on how high your taxable income goes. So, the 23% that you mention would likely mean that some of your income is taxed at 10%, some at 12%, some at 24%, and some at 32% or more. In addition, you may be subject to an investment tax of 3.8% on your net investment income. The portion of your child's tax taxed at your highest marginal rate could very well be over 23%, given that your blended rate will typically be less than your marginal rate.
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March 17, 2025
10:15 AM
1,509 Views