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Average tax rate equal (=) Taxes paid/Taxable income

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Q: What is the formula for calculating the average tax rate?
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Related questions

What is the formula for calculating cost before tax is added?

If the relevant tax rate is t% and the after-tax cost is n, then the basic cost is n/(1 - t/100).

Is your federal tax bracket your average tax rate?

No the federal tax brackets would NOT be your average income tax rate on your income. Each separate federal tax bracket amount is your marginal tax rate for that amount of your taxable income that is in that bracket amount.

How can you calculate a tax rate on a total charge?

Figuring out the tax rate on a total charge is quite simple. First you must know the tax rate you need to charge, then you use the formula tax= total amount- (total amount/(1 + tax rate)).

Cost of equity 16 before tax cost of debt 13 marginal tax rate 40 stock sells at book value what is the after tax weighted average cost of capital?

I have just started taking finance class in college. I found the formula to this equation on wikipedia. Did i win anything? After tax cost of debt formula before tax rate x (1 - marginal tax) Therefore: 13% x (1 - 40%) = .078 > 7.8%

What is the difference between average tax rate and marginal tax rate?

Average is the total amount of tax divided by the total amount of 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.

What are the effects of a corporate tax on the Weighted Average Cost of Capital of a business?

Only when interest paid on debt is allowed to be tax deductible that a corporate tax will help pull the WACC down. This is because we used an after-tax rate for cost of debt in calculating WACC. And by using the after-tax rate we are assumming that the government allows companies to use interest paid on debt reduce their income tax obligations, hence creating a tax-shield benefit for adding debt. From Peerawich

What is average rate of tax?

It depends which country you live in.

What is the difference between corporate tax rate and average tax rate?

well corporate tax rates are dumb. and average tax rates dumber. soo does anyone in the house want to itch my butt? well i alreay did! ha ha!

What are linear taxes?

Linear taxes is the situation when the average tax rate is 20%. When this happens the tax rate will not increase with a higher income.

How do you calculate profession tax Excel formula for February month?

I do not understand what "professinal tax" means, but here is a generic response to the question about calculating tax.EXAMPLE:In cell B2 enter tax rate.In cell B3 enter amount to which tax will apply.In cell B4 enter the formula =B3*B2 and observe the tax amount.

What are the differences between tax rates?

Total income tax as a percentage of total taxable income is the average tax rate, whereas total income tax as a percentage of total economic income is the effective tax rate.

Marginal Tax Rate Calculator?

Marginal Tax Rate Calculator Knowing your income tax rate can help you calculate your tax liability for unexpected income, retirement planning or investment income. This calculator helps you estimate your average tax rate, your current tax bracket, and your marginal tax rate for the 2010 tax year. Please note that this calculator uses the 2010 preliminary tax tables subject to change by the IRS.