52 Ways #14 - All Tax Rates are Not the Same - SimpliFi
How are marginal and effective tax rates different? Marginal Tax Rates represent what you pay on your last dollar of taxable income. IRS tax brackets establish a series of rates that apply to different levels of your taxable income. So, if you made $60,000 last year, you’ll pay 22% on the amount above $39,475, but different rates on taxable income below that. Effective Tax Rates represent what you actually pay in taxes. If you made $60,000 last year, and paid $9.000 in federal taxes, your effective tax rate is 15%, while your marginal tax rate is 22%. We’re happy to explain further, or help you use tax rates as part of your financial planning. Just give us a call! This information is provided for general information purposes only and is not intended to provide specific investment advice. The information in the articles should not be relied on for tax reporting, accounting, or valuation purposes. Past performance is not a guarantee of future performance. It is not possible to invest directly in an index. Please note that links to third party websites are provided as a courtesy. When you link to a third-party website, you are leaving this website. We make no representation as to the completeness or accuracy of information provided at these websites. Nor are we liable for any issues or consequences arising out of your access to or your use of third-party technologies or websites made available through this website.