Effective Income Tax Rate

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Definition: Effective Income Tax Rate

Effective Income Tax Rate
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Full Definition of Effective Income Tax Rate

The actual rate at which a taxpayer pays taxes on income accounting for all taxes and offsets. The rate is calculated by dividing the total of all taxes paid, less offsets, by the total taxable income. The effective rate is typically lower than the tax bracket, which is currently based on a progressive rate scale. For example, a person in the 28% tax bracket who paid a total of state and federal taxes of $13,000 on $100,000 of taxable income has an effective tax rate of 13%.

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April 19, 2024 https://payrollheaven.com/define/effective-income-tax-rate/.
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Effective Income Tax Rate. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/effective-income-tax-rate/ (accessed: April 19, 2024).
American Psychological Association (APA):
Effective Income Tax Rate. PayrollHeaven.com. Retrieved April 19, 2024
, from PayrollHeaven.com website: https://payrollheaven.com/define/effective-income-tax-rate/

Definition Sources

Definitions for Effective Income Tax Rate are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.