What is Blended Tax Rate? I got 14.1%. My taxable income is $31,000ish. Why not 12% (Tax Bracket rate)?

[thusspokebilly]

Thanks very much.

[KeithS-2020]

@Dslomer64 The reason for the $5 difference is that the tax tables are based on the middle of that small bracket. Continuing your example, the tax on $80,025 is $13,464. A person with Taxable Income of $80,049 should pay $13,468, but per the tables will only pay the same $13,464.

[Al durham]

I need to finish file my income taxes

[MarilynG1]

@Al durham TurboTax does not use the blended rate to calculate your taxes.  The IRS specifies the method, depending on the type of income shown in your return, so this would not prevent you filing your return.

Click this link for more info on the Blended Tax Rate.

[DavidLPeters]

I am now working on my Taxes and my adjusted taxable income is only $6,354 but TurboTax says my Blended Tax rate is at 30.9%?  so I own $1898 to Feds?  

Something doesn't seem right about this. 

Is TurboTax having issues with calculations. I should be at 10% lowest level.  

[SamS1]

You must have other taxes from Sch 2 in additional to your income taxes that is driving the blended rate higher.  Did you have self employment income?  If you had a net profit on self employment income, you must pay self employment taxes on your net income.  This is in addtional to your income tax.  The rate is 15.3% of your self employment income.  Did you have an Affordable Care Act premium credit repayment?  Something is driving the blended rate to be more than your marginal tax rate, with is 10%.  You can review your 1040 in the following steps:

1. While in your TurboTax account, select Tax Tools in the left margin
2. Select Tools
3. Select View a Tax Summary
4. In the left margin, select Preview my 1040
5. Scroll down till you find Sch 2.  That schedule will have any additional taxes you are being assessed.
6. Select "Back" when done.

[DavidLPeters]

ahh...ya, most of my income is on 1099's.  

so even with all my deductions and adjusted gross income so low I have to pay that much in Taxes?  Dang. 

[Kahugu]

What about if the only income you have is your salary which grew by 33,500 for year 2022 compared to 2021 the blended rate is 16% which gives a tax liability higher than the withholding amount. I now owe taxes, how does that work?

[JosephS1]

A blended tax rate is a net percentage of your total tax compared to your total income.  As your income grows, you step up the ladder in your tax rate.  That does not mean your total income is taxed at the highest rate you have climbed into but is "blended" with the lower rates you are taxed at for that particular income level.  You can see this better by looking at the tax charts in the link below:

Federal Tax Rates for 2022

@Kahugu

[DBianchini]

I'm never using Turbotax again. They want to tax me at 35% and I only made $29k last year. Something is terribly wrong with their software! Thieves! 

[rbarretto54]

My blended tax rate was 306% !!??? How can it be? Last year it was 0%. And everything else was the same, same occupation, similar income, only the car was way more expensive. 

[MonikaK1]

A blended tax rate, also known as the effective tax rate, is derived from a number of factors. The effective tax rate for individuals is the average rate at which their earned income, such as wages, and unearned income, such as stock dividends, are taxed. If you received income from a variety of things like stocks and bonds, interest, dividends, or self-employment, they may all play a role in determining your blended tax rate. 

Also, this year, several tax credits have been lowered to amounts before the coronavirus pandemic—or eliminated entirely. This includes the Child Tax Credit, the Child and Dependent Care Credit, and more. Check if these changes affected your net tax.

Double-check your entries for income, taxes paid, and deductions to confirm they are correct. Compare the individual line items with last year's return as well, if applicable.

See this help article for more information.

For Federal income taxes, the tax rate brackets for 2022 are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. To see how the tax brackets apply to you for this year, and for a tool to determine your marginal (the highest part of your income) tax rate, see here.

You can preview your return before filing to review the forms that TurboTax has prepared from your entries and to find out how your taxes were calculated. See here for details.