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sgeida
March 2, 2021
Question

Can anyone tell me what a Blended Tax Rate is for an individual?

  • March 2, 2021
  • 1 reply
  • 0 views
The 'explainwhy' section of turbotax shows I have a BTR of 12.5%. And the liability it calcs off my taxable income is a little more than 12.5%. What gives?

1 reply

D
DavidD66
March 2, 2021

The IRS calculates taxes using a progressive rate, based on your filing status and income level. Different levels of income are taxed at different rates. Additionally, different types of income (such as dividends or capital gains) may have separate tax rates.  The blended tax rate is the overall rate you pay on your taxable income.  The blended tax rate is not used to calculate your tax, it is a result after your taxable is calculated. 

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