Effective tax rate

128grazer — Wed, 05 Mar 2025 00:04:13 GMT

My effective tax rate is over 37%. Last year it was 19%. My adjusted r gross income is only slightly higher. Is something wrong with the tax rate calculation?

Re: Effective tax rate

MonikaK1 — Wed, 05 Mar 2025 01:19:35 GMT

There may be several reasons that your total Federal tax liability doesn't match the tax tables or your results from last year.

A blended tax rate, also known as the effective tax rate, is derived from a 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, or self-employment, they may all play a role in determining your blended tax rate.

For Federal income taxes, the tax rate brackets for 2024 are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. To see how the tax brackets apply to you for this year, and for a tool to determine your marginal (the highest part of your income) tax rate, see here.

Also, note that taxes are often calculated using a different method than the tax tables. For example, if you have capital gains, the tax on those is calculated at the capital gain rate for your income level. If you are self-employed, you may have self-employment taxes in addition to income taxes.

See this help article for more information.

TurboTax calculations are covered by the 100% Accurate Calculation Guarantee.

You can preview your return before filing to find out how your taxes were calculated. See here for details.

Re: Effective tax rate

VolvoGirl — Wed, 05 Mar 2025 01:26:28 GMT

Did you get any 1099NEC for self employment income? That will increase it. Compare your tax return line by line with 2023. Maybe you’ll spot something you entered wrong or left out.

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Effective tax rate

Re: Effective tax rate

Re: Effective tax rate