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New Member
posted Mar 26, 2022 11:08:20 PM

How are Blended Tax Rate and Effective Tax Rate different?

Blended Tax Rate that I see on "ExplainWhy" are different from Effective Tax Rate on the first page of tax return (Federal Tax Return Summary section).
I thought they're supposed to be same thing.
It's weird that the Blended Tax Rate is used to calculate how much tax I owe but Effective Tax Rate is written on the tax form.

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1 Replies
Expert Alumni
Mar 27, 2022 6:28:00 AM

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. Original post by @DaveF1006