topic What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)? in Retirement tax questions

What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

yu0106 — Sun, 09 Feb 2020 21:27:45 GMT

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Brac...

DavidD66 — Sun, 09 Feb 2020 21:42:43 GMT

Your blended tax rate is the amount of tax you paid (or will pay) for the year, divided by your adjusted gross income (AGI). The 12% you mention is your marginal tax rate, it is the rate at which the last dollar you earned was taxed.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Brac...

yu0106 — Sun, 09 Feb 2020 21:53:49 GMT

Where can I find the Blended Tax Rate table?

I found the link was told me my tax amount is $3611.

https://www.efile.com/calculate-your-income-tax-rate-by-bracket/

Taxturbo tells me my tax amount is $4456.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Brac...

DaveF1006 — Sun, 09 Feb 2020 22:43:13 GMT

A blended tax rate also known as the effective tax rate is arrived at 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 or self-employment, this may all play a role in determining your blended tax rate. It is hard to tell though without knowing what type of income you received during the year.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Brac...

yu0106 — Sun, 09 Feb 2020 22:50:15 GMT

The link below tells me that my Effective Tax Rate is 11.39%.

https://www.efile.com/calculate-your-income-tax-rate-by-bracket/

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

kol77 — Sun, 19 Apr 2020 16:56:55 GMT

How is my blended tax rate 52.8% according to TurboTax Deluxe? This seems outrageous! I made considerably less money in 2019 compared to 2018, yet TTD is showing me a higher tax liability, in addition to a ridiculously high blended tax rate. ( I made less than $17k in 2019)

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

britt508 — Sat, 25 Apr 2020 14:31:06 GMT

Wondering the same thing - my blended tax rate this year says 21.3% and my tax liability has more than doubled in the last year. We only made $3500 more in taxable income and are nowhere near a higher tax bracket. This makes zero sense.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

Dslomer64 — Mon, 27 Apr 2020 19:05:57 GMT

(Deleted by poster--me)

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

Dslomer64 — Mon, 27 Apr 2020 19:05:10 GMT

Deleted by Poster (me)

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

britt508 — Mon, 27 Apr 2020 03:27:11 GMT

I’m actually nowhere near that income. I did figure out a few things though. Apparently this year they are putting your total tax liability and THEN subtracting the credits a few lines later. So our liability only went up about $1200 instead of doubled. The reason for this (from my understanding of what my CPA friend told me) is that in the 12% tax bracket last year they weren’t taxing the first $19k of your income, this year that number changed to $9700, so they are affectively taxing almost $10k more of your income without “increasing” taxes.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

Dslomer64 — Tue, 28 Apr 2020 10:56:49 GMT

I am afraid my wonderful two-reply thesis contained a lot of garbage, misinformation. So, I deleted it.

Of course, the Tax Tables do work, they’re logical, and well-designed, but they’re a little misleading, with those 10%, 12%, 22%, 24%, etc. brackets being mentioned without explaining how each one is used to process your Taxable Income (TaxInc) into Tax due as found in the Tax Tables. An example may clarify how the Tables work.

Tax brackets for current tax year 2019, Single filer info.

*Tax rate*	Single filers TaxInc Chunks	Width of TaxInc Chunk
10%	$ 0 – 9,700	$ 9,700
12%	9,701 – 39,475	*29,774* *
22%	39,476 – 84,200	44,724
24%	84,201 – . . .	N/A

Example: Joe is a Single Filer with $80,000 in TaxInc. He is indeed in the 22% marginal tax rate bracket, but this only applies to the part of his TaxInc between $ 39,476 and 84,200, which is $ 40,526 **.

He only pays	10% on the first	$ 9,700	, which is	$ 970
then only	12% on the next	*** 29,774**	, which is	3,573
and finally	22% on the last	**** 40,526**	, which is	8,916
		$ 80,000		$ 13,459

Total tax due is $13,459.

If you look up $80,000 in the Tax Tables, you find $ 13,464, which is $ 5 more, but close enough, I suppose. I triple-checked my work and found nothing wrong. I might be inclined to include the table with my return and pay only $ 13,459, but is it worth chancing an audit? If the difference were $100, yeah, it’s probably worth it.

Point is, don’t figure your tax per the example, just let the example show you that you are NOT taxed at 22% of your Taxable Income of $80,000. Just look up Taxable income in the Tax Tables. They do work, and fairly, given the desired result set by Congress and the IRS.

BTW, Tax_Due / Taxable_Income gives a percent:

$ 13,459 / $ 80,000 ≈ 0.168 = 16.8%,

and, of course, not 22%. I suppose you could call this 16.8% the “blended tax rate” or “effective tax rate”. Whatever you call it, it’s the rate at which your Taxable Income is actually taxed.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

thusspokebilly — Thu, 15 Oct 2020 21:47:56 GMT

I have a blended tax rate of 51.9% on taxable income of $11,139 after deductions. Why is this rate so high?!!!!

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

Critter-3 — Thu, 15 Oct 2020 22:00:26 GMT

Ok ... the blended rate takes into consideration ALL the taxes you pay on the return plus the penalties ... so review the 1040 lines 12a to 19 including Sch 2 & 3. I would assume you have self employment income and/or early retirement distributions.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

thusspokebilly — Thu, 15 Oct 2020 22:07:56 GMT

I had only self-employed income to report during this period. It's simply hard to imagine why the tax burden would be so high on so little.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

Critter-3 — Thu, 15 Oct 2020 22:21:54 GMT

LOOK at the return ...

SE taxes would have been assessed on the sch C profit and federal taxes only on the taxable income

... a simple example =

Sch C profits on $30K x .153 = $4590

Fed tax on $11,000 x 10% = 1100

4590+1100= 5690

5690 divided by 11,000 = 52%

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

thusspokebilly — Fri, 16 Oct 2020 03:30:42 GMT

Thanks very much.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

KeithS-2020 — Sun, 31 Jan 2021 22:58:01 GMT

@Dslomer64 The reason for the $5 difference is that the tax tables are based on the middle of that small bracket. Continuing your example, the tax on $80,025 is $13,464. A person with Taxable Income of $80,049 should pay $13,468, but per the tables will only pay the same $13,464.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Brac...

Al durham — Wed, 10 Feb 2021 15:42:30 GMT

I need to finish file my income taxes

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Brac...

MarilynG1 — Wed, 10 Feb 2021 19:19:32 GMT

@Al durham TurboTax does not use the blended rate to calculate your taxes. The IRS specifies the method, depending on the type of income shown in your return, so this would not prevent you filing your return.

Click this link for more info on the Blended Tax Rate.

Re: What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

DavidLPeters — Sun, 07 Mar 2021 20:39:49 GMT

I am now working on my Taxes and my adjusted taxable income is only $6,354 but TurboTax says my Blended Tax rate is at 30.9%? so I own $1898 to Feds?

Something doesn't seem right about this.

Is TurboTax having issues with calculations. I should be at 10% lowest level.