What is the marginal tax rate and effective tax rate?
Since deductions and credits (and rates) seem to have an uneven effect, the rate any taxpayer pays on say the first $1 is not the same on the first $1 after $10 mill. The first $ is really not taxed at all, because the benefits, deduction are available that other one may be taxed fully, as all benefits and tax reductions have been expended. That is the marginal rate - the amount you pay on the NEXT $ you earn. The effective rate is the percent derived by taking the total tax actually paid divivded by the total income actually made. Which once again, because of different rates at different income levels, the effects of deductions, credits, maybe Net operating Loss carryforwards, etc., is really an average of everything and not a stated rate. That is the effective rate - the rate the taaxpayer actually pays, all things considered.
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Answer . I don't think so. A marginal rate is the amount you pay on the next $ of income. As our tax brackets are progressive, and with the additional income you get no mo…re exemptions/deductions than the previous, it would seem it would have to be positive...or at least as positive as you were before, (so if the marginal increase still means you get taxable income (from child care, or earned income credit, etc.) I guess your entire effective rate would be negative.
Answer . In the US - NO. Not even close. The marginal rate cannot be higher than the absolute statute rate. While State taxes may also enter the consideration, they are gen…erally maxed around 9%, and are deductible on the Federal, so it would be 35% less than that or combined for @41%.. If taxable income is over-- . $0 to $7,825 10% of the amount over $0. $7,825 to $31,850 $782.50 plus 15% of the amount over 7,825. $31,850 to $77,100 $4,386.25 plus 25% of the amount over 31,850. $77,100 $160,850$15,698.75 plus 28% of the amount over 77,100. $160,850 $349,700 $39,148.75 plus 33% of the amount over 160,850. $349,700 no limit $101,469.25 plus 35% of the amount over 349,700.
Capital lease payments will affect cash flow from both operating activities and financing activities. A capital lease payment is treated as debt service. The portion of the… payment applied to principal is a cash outflow from financing activities, and the portion applied to interest is a cash outflow from operating activities.
The question cannot be answerd.. Marginal (or effective rates for that matter), need to be based on taxable, (or perhaps in a convoluted way), book income. Certainly not on o…perating income, and note this is an operating loss! And not knowing anything else, the marginal rate, which is on the next level of income, we need to know if the rate changes at what level.
Average is the total amount of tax divided by the total amount of income...it therefore includes all deductions and tax brackets, usually lower % ones, getting to the total as… part of it...average.. The marginal, is on the NEXT $ of income. So it basically is going to be closer (or exactly) the highest tax rate you pay, being applicable to the last bracket your in, and generally having already used up all dedcutions available, and in fact, maybe losing some because some dedcutions drop off above certain incomes.. Clear as mud?. Marginal rate...the amount of tax pid on the NEXT $ of income...average rate includes the lower brackets and he tax, or no tax, on the first amounts of income.
The general rule is: 45%, but there is much more. The U.S. Federal tax rates for gifts are on the same tax rate schedule as the estate tax. If the gift is a "present interest"… gift (they can use it or benefit from it today) then each person giving the gift has, in 2009, a $13,000 exclusion from tax. Above that each person has a $1,000,000 lifetime exemption from gift tax but is required to file a gift tax return to keep track of that lifetime exemption. Gifts above that are currently being taxed at 45%.. So if you put $1,500,000 in a trust for your friends and relatives (not your spouse) and they have no rights to the trust for awhile and you have never gifted over the annual exclusion before, the first $1,000,000 is not taxed and the $500,000 is taxed at 45%. The person giving the gift pays the tax.. As with all tax law there are other circumstances that can make the general rule different than stated above. For instance, you can force the recipient to pay the tax.
The maximum tax bracket or schedule amount would be at 35%. Go to the IRS.gov web site and use the search box for 2009 federal tax rate schedules go to page 13 Click on the be…low Related Link
From form 1120 instructions schedule J line 1 and line 2. A qualified personal service corporation is taxed at a flat rate of 35% on taxable income. If the corporation is a …qualified personal service corporation, check the box on line 2 even if the corporation has no tax liability. Line 1 If the corporation is a member of a controlled group, check the box on line 1. Complete and attach Schedule O (Form 1120), Consent Plan and Apportionment Schedule for a Controlled Group. Component members of a controlled group must use Schedule O to report the apportionment of taxable income, income tax, and certain tax benefits between the members of the group. See Schedule O and the Instructions for Schedule O for more information. TAX RATE SCHEDULE If taxable income (line 30, Form 1120) on page 1 is: . Over- . But not over- . Tax is: . Of the amount over- . $0. $50,000. 15% . $0. 50,000. 75,000. $ 7,500 + 25% . 50,000. 75,000. 100,000. 13,750 + 34% . 75,000. 100,000. 335,000. 22,250 + 39% . 100,000. 335,000. 10,000,000. 113,900 + 34% . 335,000. 10,000,000. 15,000,000. 3,400,000 + 35% . 10,000,000. 15,000,000. 18,333,333. 5,150,000 + 38% . 15,000,000. 18,333,333. - - - - -. 35% . 0. Go to the IRS.gov web site and use the search box for FORM 1120 Click on the below Related Link
For federal and state income tax purpose because of any adjustments, deduction's, exemptions, nonrefundable tax credits, refundable tax credit, additions to tax, etc. before y…ou arrive at the Effective tax rate.
No, an increase in the tax rate only affects a positive income; at break even there is no amount to tax
In Income Taxes
In the US, from 2009 to 2012, Apple paid $5.6 billion on $65 billon in Profits, making the real tax rate 8.6%....this is a main reason that Apple is so profitable, it pays ver…y little tax to the US Treasury. It funnels its income to Ireland where the country allows it to pay virtually no income tax...from a Wall Street Journal article I read recently...