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posted: Apr. 1, 2008 @ 8:05p
mikef07
Senior Member - 3K
posted: Apr. 1, 2008 @ 8:19p
dolmar said: What was your effective tax rate on your gross income.
Example my effective tax rate for 2007 was 5.7% based on my gross income. My agi was 13.8% of my gross income. I was not subject to AMT.
My gross income was well over $100k.
Income was $260,000 (Wife and me) Tax Liability was $36,208
14.3% of gross income
Not as good as I hoped, but it is what it is.
InterestedOnlooker
Senior Member - 1K
posted: Apr. 1, 2008 @ 8:32p
Gross Income: $80K
Tax: $0
Effective Tax Rate: 0%
Yes, seriously. We had completely legitimate deductions coming out of our ears. The computer program showed when we reached zero & so DH stopped entering anymore of our deductions. We had more to put in but were already at zero. I was stunned.
It was a completely weird year. New baby with health issues meant our family shelled out nearly $10K in out-of-pocket medical expenses (even with decent, not good, but decent insurance). Big charitable contributions. Mortgage interest deduction because we are in a house that is too big for us that we can barely afford. Student loan interest deduction. And the list goes on.
The refund was nice. We try to get as close as possible to zero...not owing or getting a refund. But, DH is already claiming 14 exemptions at work. We're reluctant to stick out like a sore thumb by claiming more.
This year income will jump by $7,000 due to a raise but we have a new kid coming in Oct so my goal is to get my tax rate to a even 0.00%
tazzy531
Senior Member - 4K
posted: Apr. 1, 2008 @ 10:17p
I'm embarassed to say... Federal: 18.96% NY/NYC: 10.15% Total of AGI: 28.44% NYC, Renter, not married, no kids, no student loan interest, great health insurance, yuppy, investment income...
Mine's even worse -- just over 20% of gross income. I got hit with the AMT for the first time this year. Live in a high-tax state, so my total taxes are pretty obscene.
tazzy531 said: I'm embarassed to say... 18.96% NYC, Renter, not married, no kids, no student loan interest, great health insurance, yuppy, investment income...
If only I can deduct happy hour expenses...
18% isn't bad, you are just being hit with the luxury tax. The one you get by having no kids, no house to deal with hah
Cashless
Member
posted: Apr. 1, 2008 @ 11:38p
-26% yeah.. I'm pretty poor.
CycloneFW
Senior Member
posted: Apr. 2, 2008 @ 12:12a
AGI: Embarrassingly low for this forum No State Tax
Liability: 3.95%
Thank you tuition deduction (no more of those until Dr. CycloneFW), student loan interest (25 more years to go!), Section 121 exclusion (sold primary home before markets dropped!).
dimatkach
Senior Member
posted: Apr. 2, 2008 @ 6:47a
dolmar said: My agi was 13.8% of my gross income. I was not subject to AMT. Alimony? dolmar said: Example my effective tax rate for 2007 was 5.7% based on my gross income. So, you must be in like 80% tax braket? (5.7% of your gross income is 78.66% of the agi)
dolmar said: My agi was 13.8% of my gross income. How does this work?
mikef07
Senior Member - 3K
posted: Apr. 2, 2008 @ 8:22a
scott1961 said: How do you figure it out?
Take your amount of income and the amount of taxes you have to pay and divide the taxes into the amount.
Example.
You make $200,000. You owe $20,000 (meaning the total amount you paid in taxes for the year) in taxes. Your taxable income may be only $150,000, but you made $200,000.
$20,000 is 10% of 200,000. Effective tax rate would be 10%
I left my investment income, rental income, and any other non work related income revenue off. Others may have not.
zzyzzx
Senior Member - 3K
posted: Apr. 2, 2008 @ 8:25a
Roughly 19.6% federal income tax 8.7% state income tax
RS4Rings
Back in Rehab
posted: Apr. 2, 2008 @ 8:26a
Is this how you figure out Fed rate? text says I'm at 24.87% guessing that blows?
mikef07
Senior Member - 3K
posted: Apr. 2, 2008 @ 8:28a
scott1961 said: Is this how you figure out Fed rate? text says I'm at 24.87% guessing that blows?
You will know by looking at your tax return (line 63). It should give you a total tax liability amount and divide that into your actual income and not the adjusted income on your return.
RS4Rings
Back in Rehab
posted: Apr. 2, 2008 @ 8:32a
mikef07 said: scott1961 said: Is this how you figure out Fed rate? text says I'm at 24.87% guessing that blows?
You will know by looking at your tax return (line 63). It should give you a total tax liability amount and divide that into your actual income and not the adjusted income on your return. Looks right line 22 total income 359,947 line 63 88,406 = .246
mikef07
Senior Member - 3K
posted: Apr. 2, 2008 @ 8:35a
scott1961 said: mikef07 said: scott1961 said: Is this how you figure out Fed rate? text says I'm at 24.87% guessing that blows?
You will know by looking at your tax return (line 63). It should give you a total tax liability amount and divide that into your actual income and not the adjusted income on your return. Looks right line 22 total income 359,947 line 63 88,406 = .246
Yep, although I did line 7 because I did not want to count investments and other things, but to each his own.
RS4Rings
Back in Rehab
posted: Apr. 2, 2008 @ 8:37a
mikef07 said: Yep, although I did line 7 because I did not want to count investments and other things, but to each his own. My only other income was 1099 INT so guess it did not matter since it's taxed at my full rate
tazzy531
Senior Member - 4K
posted: Apr. 2, 2008 @ 9:01a
TurboTax prints this on the first page of the final tax report. I believe all the automated softwares do that.
On the other hand, it's not too difficult to calculate total tax liability / AGI
brokestudent
Broke Member
posted: Apr. 2, 2008 @ 9:42a
Mine was 11.1% - last year we had 0.3% due to the various Katrina deductions we were eligible for. My congressman really brought the pork home, I live 5 hours away from where Katrina hit - we had branches down in the yard and the power our for a day, but my county was included in the disaster area.
cafe
Member
posted: Apr. 2, 2008 @ 9:59a
16.3% on $120K income. We have no kids, no house, just finished paying for school so no tuition deduction either. Very depressed to know a good chunk of my tax money goes to the war instead of schools, libraries and highways here...
I suspect that a lot of people posting their effective tax rates here are calculating them very differently from each other. For instance, what taxes are included in the calculation? Do you only include federal tax or federal plus state plus SS and medicare? As for the income, do you use AGI or your gross income? I realize that this thread is created for entertainment purposes only and that the information here can't help or hurt anyone, but these entertainment purposes would still be served a lot better by people here agreeing on a consistent way to calculate their effective tax rate.
dimatkach said: dolmar said: My agi was 13.8% of my gross income. I was not subject to AMT. Alimony? dolmar said: Example my effective tax rate for 2007 was 5.7% based on my gross income. So, you must be in like 80% tax braket? (5.7% of your gross income is 78.66% of the agi)
No Alimony, Single non married,no dependents, no student loans, no earned income. All my income is reported on 1099's and K-1. I had some short term capital gains, long term capital gains, interest income and partnership income. Only deductions on my personal taxes was interest on my home, property taxes, registration fee of my car, medical insurance premium, and my state income taxes.
Also remember I live Ca and you pay 9.30% on all income after $40k vs Federally some of my income was only taxed at 15%(long term capital gains or dividend income which is almost the same as my state taxes).
So I took my total tax bill ie added Federal + State and divided that by what my Gross income was to get my effective tax-rate. Then I added up all the income shown on K-1+1099I and 1099B that is what I called Gross income. Then I took my AGI and divided that by my gross income to get % off taxable income I reported.
I know my effective tax rate and gross income and AGI are not typical examples as I take none of my income as earned income and I take a lot of deductions against income before it ever hits my personal tax return but people can still use it as a data point to compare I guess.
michal1980 said: But I geuss someone has to pay america's bills. All those freeloaders.
LOL small % of a big number is still a big number. So not sure how you can call people freeloaders. I paid well over $20k in taxes and more than likely paid more taxes than everyone who has posted so far except Scott. I receive $0 benefits as I did not qualify for low interest student loans from government when I went to college, I make too much to get a rebate check, I never get any benefits at all for my taxes and because I do not pay FICA I can not contribute to IRA or collect SS either.
But I guess with comments like that you consider people paying millions in taxes who effective tax rate is low freeloaders even tho pay more taxes than almost everyone.
I don't even want to look. We are both W-2 corporate drones almost maxing Social Security living in one of the worst states for Local and State tax burdens.
Dolmar, you said "Then I added up all the income shown on K-1+1099I and 1099B that is what I called Gross income."...for the 1099B I hope you don't mean you just used the figure on the 1099B (as opposed to the gain/loss from the sales reported on schedule D). If your using the 1099B number for gross income that is likely very misleading...unless you are subtracting your cost basis
Total income: 60K (My wife and I). No kids, no dependents, no house. Federal rate: 9.41% State rate: 5.3%
Galun000
Ancient Member
posted: Apr. 2, 2008 @ 11:35a
According to Turbo Tax, Fed effective rate was 14.6%, CA State effective rate would probably be around 9.3%, and then there are all the other misc taxes.
Paying AMT and in income range where pretty much all deductions except from mortgage interest are phased out.
Working really hard to get our combined income high enough so AMT won't be an issue.
dolmar said: I paid well over $20k in taxes and more than likely paid more taxes than everyone who has posted so far except Scott.This is definitely false.
54k in taxes 36k in taxes Also, my tax liability will be way over 20k, but I have no idea what it is yet because I only just got all my stuff to my CPA on 3/31 (the deadline to get taxes filed by 4/15).
mikef07 said: Income was $260,000 (Wife and me) Tax Liability was $36,208My back-of-the-envelope arithmetic says this is about 90-100k of deductions. Care to provide details ? If 60k of it is business expenses, the flavor is a bit different.
Thanks, wdsaltman95 for the explanation. I have limited knowledge in the tax area (you can see that from my posts in tax questions stickey) but when I heard he say his liability was "10% of gross" I was a bit po'ed since mine was more than 10%.
wdsaltman95 said: bravebiffy said: Hold on a sec....
So if my friend's small business (he is a sole proprietor BTW) grossed $1M and paid $100K in taxes (State and Fed) after all his personal and business expenses (i.e. labor, COGS, etc), his effective tax rate is 10%? The answer is, it depends. There are a number of possible outcomes absent further "facts." You would need to know such things as the amount of business expenses and if his business is an accrual or cash-basis taxpayer. Also, if you're trying to determine his overall "personal" effective rate rather than just his business rate, then you would need to know the amount of his other deductions.
The effective tax rate for the business is calculated as its tax expense divided by its earnings before tax. Its earnings before tax would be it gross income less business expenses (not necessarily the same as its deductions). If his business was on the accrual basis, tax expense would not necessarily equate to tax paid. Personal expenses, unless deductible, would not factor into one's effective tax rate.
So, for example, if we take a simplistic approach and assume a cash-basis taxpayer, $1mm gross income, $700k in business expenses before tax and $100k in tax expense, then the taxpayer's effective rate would be 33%.
Just as, in general, no one's personal rate provided here in this thread is necessarily comparable to any other person's rate (unless you're dealing with a "horseshoe or hand grenades" type of analysis), it can be difficult to compare effective tax rates for businesses unless you have the same or, at least a very similar, fact pattern amongst the comps.
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