Comments on: Your Actual Tax Rate Is Not Your Tax Bracket

By: Tight Fisted Miser

Tight Fisted Miser — Tue, 20 Feb 2007 20:12:26 +0000

I had a negative effective tax rate last year. That will probably be the last time that happens for me.

By: jim

jim — Tue, 20 Feb 2007 15:47:41 +0000

CPA1298 – I was barely in the 25% marginal that year because I only worked half the year.

By: CPA1298

CPA1298 — Tue, 20 Feb 2007 03:55:28 +0000

I’m confused how you could be in the 25% marginal in 2003 and only have a 4% effective; maybe you were closed to 15% that year, since you only had a partial year of work?

By: Jesse

Jesse — Mon, 19 Feb 2007 17:51:55 +0000

Sometimes the actual tax rate is also called the ‘effective’ tax rate. Knowing the difference between that and your marginal is something worthwhile whenever you need to evaluate something from a financial perspective that will have tax implications.

Nice post.

By: Clever Dude

Clever Dude — Mon, 19 Feb 2007 15:50:50 +0000

I seriously never thought of it that way. However, I haven’t really checked what tax bracket we’re in anyway. I’ll have to look it over on our taxes this year.

Thanks Jimbo!