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jroman837
New Member

Why is my blended tax rate so high.

2023 was 11.3% and 2024 was 13.2% and my taxable income was $1,000 lower
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1 Reply
JohnW152
Employee Tax Expert

Why is my blended tax rate so high.

It depends on what kind of, and how much, income you had in the two years.  You may be in a higher tax bracket this year, or you may have had more or less of certain types of income than you had the previous year. 

 

Your blended tax rate is computed based on a number of factors. Your tax rate is the average rate of taxation for items such as earned income like wages and unearned income like dividends. 

 

But if you received other types of income -- capital gains, for example -- this can cause your blended tax rate to vary.  Capital gains are generally taxed at lower rates than other types of income.  On the other end of the spectrum, the addition of self-employment tax will increase your blended rate. 

 

Without knowing the types of income you had in the last two years, it's hard to answer your question.

 

See the TurboTax article 2024-2025 Tax Brackets: Find Your Federal Tax Rate Schedules to see if you may have jumped into a higher tax bracket in 2024. 

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