Effective Tax Rates: How Much You Really Pay In Taxes

If you make $60,000 per year, what do you actually take home? You know it isn’t the full $60,000. But, if you are in the 22% tax bracket, does that mean you’ll pay $13,200 in taxes? That would seem to be the intuitive answer since $60,000 multiplied by 0.22 equals $13,200.

But, in fact, what you will pay in income taxes will probably be much lower than that. To understand why, you need to understand the difference between marginal tax rates and effective tax rates which we will explain in this article.

However, calculating your income tax payments alone doesn't give you a true picture of how much you'll really pay in taxes this year. There are several other things to consider if you want to what you effectively pay in taxes as a percentage of your take-home pay. In this article, we’ll explain how to find out what you’re really taking home in income.