In my summary, my taxable income is $11,125, My total tax is $l,111.00 and my effective tax rate is 4.45%. Does this sound right to you? It appears I am being charged more like 10%. Can you explain how the tax rate of 4.45% of 11,125.00 amounts to $l,111.00 ?
It depends. The effective tax rate would be calculated not with Taxable Income in the denominator but with Adjusted Gross Income. This would be all the income earned before any deductions and credits.
Thank you for your response to my question. I felt reasonably sure that the calculations were correct, but your explanation made me at least partially understand the calculation behind the scenes. I am comfortable with your answer. I have utilized and trusted Turbo Tax for many years and have always found them to be accurate.