It’s tax time. Do you have your federal income tax return handy? What is your effective federal income tax rate? Did it go up or down in 2018 compared to 2017?
Total tax/total income = effective federal income tax rate
15.54% That’s the effective federal income tax rate for my household for 2018.
Here is my effective federal income tax rate for the past several years:
2018 15.54%
2017 18.82%
2016 15.99%
2015 16.58%
2014 10.81%
In years prior to 2014 my effective rate ranged from ~9%-12%, iirc. My wife was in school back then which means that our household income was significantly lower and we had a few deductions available to us that are not applicable for us now.
I think this is an important number to know. How can we assess the impact of the Trump tax cuts on our personal finances if we don’t calculate our effective rate and compare to 2017? We spend a lot of time on this forum talking about taxes. Your effective federal income tax rate is an important bit of information to have in mind during those discussions.
