Effective tax rate

user015280 — Sat, 01 Jun 2019 05:10:25 GMT

Was there a problem with the calculation in the 2015 Premier TT? It was not being calculated as described by TT staff.

There isn't one set definition of effective tax rate. Th...

AnthonyC — Sat, 01 Jun 2019 05:10:29 GMT

There isn't one set definition of effective tax rate. The most common formula takes total tax paid (after credits have been applied) and divides by total income. So, on a Form 1040 for 2016, line 63 divided by line 22.

However, the TurboTax program uses a slightly different effective tax rate calculation than the more widespread version. It uses adjusted gross income instead of total income (line 37), but does still use total tax after credits. There are some formulas that exclude credits from this calculation and use tax paid before credits (line 44).

topic Effective tax rate in Get your taxes done using TurboTax

Effective tax rate

There isn't one set definition of effective tax rate. Th...