Taxes are unavoidable and without planning, the annual tax liability can be very uncertain. Use the following calculator to help determine your estimated tax liability along with your average and marginal tax rates.
Do you know your effective tax rate? Federal income tax is calculated using a progressive tax structure, meaning that your effective tax rate is lower than your income tax bracket. Why? As this calculator shows, even if taxable income "puts" you in a particular income tax bracket, overall you benefit from being taxed at the lower brackets first.
* The 3.8% Medicare tax will apply to the lesser of your net investment income or the amount of adjusted gross income in excess of the applicable threshold. Net investment income includes interest, dividends, royalties, annuity distributions (not tax-deferred accumulation), rents, income from passive business activities, income from trading in financial instruments or commodities, and gains from assets held for investment like stock and other securities.
The calculator assumes all Qualified plan/IRA contribution values are either pre-tax or deductible contributions. Calculation does not adjust for the greater of itemized vs. standard deductions.
This calculator is provided for educational purposes only. This calculator is made available to you as a self-help tool for your independent use and is not intended to provide tax, legal or financial advice. The information provided is hypothetical and we cannot and do not guarantee its applicability or accuracy in regards to your individual circumstances. Equitable Financial and its affiliates are not responsible for any errors or for the actions taken as a result of the information provided by this calculator. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
This analysis is based on information and assumptions provided by you. Actual results may vary. Equitable Financial and its affiliates do not provide tax or legal advice. Please consult your tax and legal advisors regarding your particular circumstances.
Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.
Equitable Financial Life Insurance Company (New York, NY). Distributors: Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI & TN) and Equitable Distributors, LLC. Equitable Financial Life Insurance Company, Equitable Advisors and Equitable Distributors are affiliated.
GE-3128026 (6/20) (Exp. 6/22)