topic If taxable income is 236K and tax due is 50K and tax rate is 12.09% how can that be when 50K is clearly more than 12.09% of 236K? in Retirement tax questions

If taxable income is 236K and tax due is 50K and tax rate is 12.09% how can that be when 50K is clearly more than 12.09% of 236K?

jmurphy-ectisp-n — Mon, 19 Oct 2020 18:37:52 GMT

how is the tax rate calculated as these figures do not compute?

Re: If taxable income is 236K and tax due is 50K and tax rate is 12.09% how can that be when 50K is clearly more than 12.09% of 236K?

Bsch4477 — Mon, 19 Oct 2020 19:36:54 GMT

Why do you think your tax rate is 12.09%. Are you looking at the effective tax rate?

Re: If taxable income is 236K and tax due is 50K and tax rate is 12.09% how can that be when 50K is clearly more than 12.09% of 236K?

Critter-3 — Tue, 20 Oct 2020 01:17:45 GMT

Your total tax bill can be comprised of more than just federal tax liability ... so review your return carefully and see what other taxes/penalties comprises your total tax liability.

Re: If taxable income is 236K and tax due is 50K and tax rate is 12.09% how can that be when 50K is clearly more than 12.09% of 236K?

SteamTrain — Tue, 20 Oct 2020 16:55:36 GMT

If your 12% is the "effective" tax rate shown on one of the information forms...this is NOT your tax bracket, it is supposedly a somewhat handwaving/feel-good number related to your gross income, and not your "taxable" income.

So perhaps to get closer to the 12% "effective" value, try the following:

1)... you use your Gross income (AGI) and not your "taxable" income, as the divisor..

2) .......and you use your Federal income tax only as the numerator .... i.e. not including any Self employment taxes that might be added into your 50k of total taxes... as the numerator (also not including any penalties that might be added in )

That should be closer to the 12%...but may not exactly match for other subtle reasons.

3) Thus, look on your form 1040 and divide line 14 by line 8b... and see if that gets close to your 12% .