Is blended tax rate wrong at 15% when I have < $8000 taxable income after deductions, shouldn't it be 10%?

[2kotori]

I live overseas, only US income is from investment's capital gains and ordinary dividends. I did not withdraw anything.

[DianeW777]

A blended tax rate, also known as the effective tax rate, is arrived at by any number of factors. The effective tax rate for individuals is the average rate at which their earned income, such as wages, and unearned income, such as stock dividends, are taxed. If you received income from a variety of things like stocks and bonds, interest, dividends, wages or self-employment, this may all play a role in determining your blended tax rate.

It's a calculation based on overall income and the amount of tax calculated on the tax return and is not specifically a marginal or capital gains tax rate.

[2kotori]

@DianeW777My foreign income is excluded, so my investment gains and dividends is the only taxable income I have.

This is just the first time since first moving overseas a while ago I've had the output says I owe taxes because my US investments actually made more than standard deduction, so I'm confused by the high taxation rate on less than $8000 income after deduction.

Just trying to make sure it is correct, as I'm used to everything zeroing out, so wasn't prepared to owe so much.

[DianeW777]

If your taxable income is roughly $8,000 the tax rate is approximately 10% so compare that to the tax liability calculated on your tax return. You can also check the IRS Tax Tables for 2021 here. There could be other factors that could affect the overall tax rate but this is the quick view.

You can be confident TurboTax will calculate the tax accurately based on your income, deductions and credits.