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Question

why did my tax rate go from 11.5 in 2023 to 14.4 in 2024?

Forum|Forum|1 year ago
February 1, 2025
1 reply
0 views

No text available

It could be due to a variety of reasons- increased income, a lower credit.

The effective tax rate is calculated by dividing tax by income. Income is based on adjusted gross income (AGI) from Form 1040, line 11, but it may include additional amounts if there are lump-sum retirement plan distributions or net unrealized appreciation in employer securities and specific options are chosen on Form 4972. Tax starts with the amount on line 18 of Form 1040, including alternative minimum tax, but excludes some additional taxes like recapture tax.