How to compute average tax rate
A marginal tax rate is the rate of tax you pay in a given income tax bracket, most commonly your highest bracket. An average tax rate is just that, the average rate paid on all taxable earnings. 22% is your “marginal” tax rate. It’s applied to your additional income over a certain threshold amount. Your effective tax rate, on the other hand, is the average rate you pay on all $60,000. It’s a much clearer indication of your real tax liability. calculate Determine (the amount or number of something) mathematically Include as an essential element in one's plans judge to be probable make a mathematical calculation or computation account: keep an account of Determine by reasoning, experience, or common sense; reckon or judge tax rate rate used to calculate tax liability In a tax system and…