It depends.
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 sources that are taxed differently, such as stocks and bonds, interest, dividends, or self-employment, they may all play a role in determining your blended tax rate. When you are self-employed, you may be liable for self-employment tax as well as income tax on the same amount (your net profit).
The Blended tax rate is not used anywhere on your tax return, it's just a measure that some may find useful.
The Blended Tax rate is:
- Tax liability (Including SE tax, capital gain and special taxes),
- Divided by
- Taxable income (Total income minus deductions, but before credits).
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.
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.
You can preview your return before filing to find out how your taxes were calculated. See here for details.
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