The effective tax rate derived from Federal Adjusted Gross Income FAGI - PDF document

1 The effective tax rate derived from Fede
The effective tax rate derived from Federal Adjusted Gross Income (FAGI) is the tax rate (percentage) as applied to FAGI that generates the amount of net tax liability as current tax provisions. The effective tax rate metric basically averages the effect of statutory FAGI modifications and tax credits and is significantly affected by allowable deductions (standard/itemized and personal exemptions) that reduce the percentage. The effective tax rate derived from FAGI income rapidly increases for resident filers with income levels of up to approximately $40,000 before tapering to a more gradual increase for income levels up to $100,000 and sharply ascends for the uppermost income levels. The higher effective tax rate for the uppermost income levels reflects a relatively lesser reduction impact of FAGI modifications and deductions coupled with a larger portion of income being subject to the highest marginal tax rate of 7.75%. All Std Ded Item Ded -0.08% -0.05% -0.10% 1-3,999 0.31% 0.31% 0.42% 4,000-9,999 1.03% 1.07% 0.41% 10,000-14,999 1.36% 1.44% 0.51% 15,000-19,999 1.77% 1.87% 0.91% 20,000-24,999 2.33% 2.49% 1.32% 25,000-29,999 2.82% 3.03% 1.81% 30,000-39,999 3.31% 3.60% 2.54% 40,000-49,999 3.61% 3.95% 3.08% 50,000-59,999 3.72% 4.10% 3.31% 60,000-69,999 3.83% 4.21% 3.51% 70,000-79,999 3.95% 4.29% 3.75% 80,000-89,999 4.06% 4.29% 3.95% 90,000-99,999 4.18% 4.32% 4.13% 100,000- 149,999 4.61% 4.62% 4.61% 150,000-199,999 5.09% 5.27% 5.07% 200,000-499,999 5.63% 5.91% 5.62% 500,000 or more 6.16% 6.43% 6.16% 4.40% 3.56% 4.82% 1 1 - 3,999 4,000 - 9,999 10,000 - 14,999 15,000 - 19,999 20,000 - 24,999 25,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50,000 - 59,999 60,000 - 69,999 70,000 - 79,999 80,000 - 89,999 90,000 - 99,999 100,000 - 149,999 150,000 - 199,999 200,000 - 499,999 500,000 or more Std Ded - 0.05% 0.31% 1.07% 1.44% 1.87% 2.49% 3.03% 3.60% 3.95% 4.10% 4.21% 4.29% 4.29% 4.32% 4.62% 5.27% 5.91% 6.43% All - 0.08% 0.31% 1.03% 1.36% 1.77% 2.33% 2.82% 3.31% 3.61% 3.72% 3.83% 3.95% 4.06% 4.18% 4.61% 5.09% 5.63% 6.16% Item Ded - 0.10% 0.42% 0.41% 0.51% 0.91% 1.32% 1.81% 2.54% 3.08% 3.31% 3.51% 3.75% 3.95% 4.13% 4.61% 5.07% 5.62% 6.16% Effective Tax Rate Derived from FAGI - 0.10% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% 1.40% 1.50% 1.60% 1.70% 1.80% 1.90% 2.00% 2.10% 2.20% 2.30% 2.40% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 3.60% 3.70% 3.80% 3.90% 4.00% 4.10% 4.20% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.90% 5.00% 5.10% 5.20% 5.30% 5.40% 5.50% 5.60% 5.70% 5.80% 5.90% 6.00% 6.10% 6.20% 6.30% 6.40% 6.50% Exhibit A11. Tax Year 2012 Resident Returns: Effective Tax Rate Derived from Federal AGI FAGI Level [$] Effective Tax Rate