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HMcW
Level 1

Effective tax rate seems low

I don't understand how TurboTax comes up with this Effective Tax Rate;

 

Adjusted Gross Income $ 118,087.00
Taxable Income $ 73,590.00
Total Tax $ 45,043.00
Effective Tax Rate 6.72%

 

Seems a lot higher than 6.72%...

 

And does that Total Tax look right? 

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3 Replies

Effective tax rate seems low

from the total tax subtract any self-employment tax.

Effective tax rate seems low

The calculation also uses the gross income not the AGI.

HMcW
Level 1

Effective tax rate seems low

SE tax is about $14,000

Gross was about $130,000

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