Republicans vying for the presidential nomination have released their tax returns showing their effective tax rates. The effective tax rate is the percentage of taxable income that was paid in taxes. In comparison, the marginal rates of individuals are 10%, 15%, 25%, 28%, 33%, and 35%.
In comparison, President Obama last year reported that his effective tax rate was about 26% on taxable income of $1.7 million, and Vice President Biden had an effective tax rate of 23% on taxable income of $379,000.
What is your effective tax rate? Divide your taxes paid by taxable income to see. For example, if your tax payments totaled $20,000 and your taxable income was $100,000, your effective tax rate would be 20%.
Items, such as interest, state and local income and sales taxes, charitable contributions, and medical deductions, claimed on Schedule A of Form 1040. Itemized deductions are subtracted from adjusted gross income to arrive at taxable income. The amount of itemized deductions is also subject to a reduction when adjusted gross income exceeds certain limits.