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What Is Your Federal Tax Rate?

February 08, 2024

The answer depends on which rate you are referring to. We have a tiered tax schedule.

If you make $150,000 it would look like this for Head of Household:
10% tax on $15,000 equals $1,500
12% on the next $59,850 equals $7,182

So far, we have $150,000 less $74,850 ($15,000+$59,850). Still to be taxed $75,150.
22% on $75,150 equals $16,533

While you might say you are in the 22% tax bracket, you are not actually paying 22% on $150,000. The 22% is referred to as your marginal tax rate.

Alternatively, the effective tax rate is:
$1,500+$7,182+$16,533 = $25,215 divided by $150,000 = 17% effective tax rate

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