Step 1. Total Income (income from all sources such as wages, salary, tips, capital gains, interest, dividends, income earned outside of US, social security, etc.)
Step 2. Adjusted Gross Income (AGI) = Total Income - Adjustments (410K, interest on student loans, alimony payments, retirement and healthcare expenses, moving expenses, etc.)
Step 3. Taxable Income = Adjusted Gross Income - standard or itemize deductions
Your tax is based upon your taxable income. Once you know your taxable income you can determine your Marginal Tax Rate by looking up the taxable income and filing status of the IRS tax brackets.
Is Effective Income Tax Rate calculated based formula below?
Effective Income Tax Rate = Payroll Tax (Federal, State, Soc. Sec, Medicare, Local, etc.) / Total Taxable Income
What other tax ratios are used when determining your tax strategy effectiveness?
Step 2. Adjusted Gross Income (AGI) = Total Income - Adjustments (410K, interest on student loans, alimony payments, retirement and healthcare expenses, moving expenses, etc.)
Step 3. Taxable Income = Adjusted Gross Income - standard or itemize deductions
Your tax is based upon your taxable income. Once you know your taxable income you can determine your Marginal Tax Rate by looking up the taxable income and filing status of the IRS tax brackets.
Is Effective Income Tax Rate calculated based formula below?
Effective Income Tax Rate = Payroll Tax (Federal, State, Soc. Sec, Medicare, Local, etc.) / Total Taxable Income
What other tax ratios are used when determining your tax strategy effectiveness?
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