Answer:
The effective tax rate for a taxable income of $145,690 would be 24.39%.
Explanation:
To find the effective tax rate, you need to calculate the total amount of tax paid on the taxable income, and then divide that amount by the taxable income, and multiply by 100 to express it as a percentage.
We can see from the marginal tax rate chart that for a taxable income of $145,690, the marginal tax rate is 24%. This means that the last dollar earned falls in the 24% tax bracket.
We can calculate this in the following steps:
Determine the taxable income in each tax bracket:
$10,276 - $41,175: $41,175 - $10,276 = $30,899
$41,176 - $89,075: $89,075 - $41,176 = $47,899
$89,076 - $170,050: $145,690 - $89,076 = $56,614
Calculate the taxes owed in each tax bracket:
$10,276 - $41,175: $30,899 x 12% = $3,707.88
$41,176 - $89,075: $47,899 x 22% = $10,526.78
$89,076 - $170,050: $56,614 x 24% = $13,547.36
Add up the taxes owed in each bracket to find the total taxes: $3,707.88 + $10,526.78 + $13,547.36 = $27,782.02
Divide the total taxes by the taxable income and multiply by 100 to find the effective tax rate: $27,782.02 / $145,690 x 100 = 19.02%
The effective tax rate for a taxable income of $145,690 would be 19.02%.
It's worth to mention that this is a rough estimate and The final tax calculation would be provided by a tax preparer or software and it would take into account many deductions, credits and any other tax benefits that would affect the final calculation.