What's the difference between marginal and effective tax rate?
Marginal rate is the tax on your last dollar earned (your top bracket — 22%, 24%, etc.). Effective rate is your total tax divided by total income — typically much lower because progressive brackets tax earlier dollars at lower rates. Earning $150K, your marginal might be 24% but effective only 17%.
More context
Marginal rate is the tax on your last dollar earned (your top bracket — 22%, 24%, etc.). Effective rate is your total tax divided by total income — typically much lower because progressive brackets tax earlier dollars at lower rates. Earning $150K, your marginal might be 24% but effective only 17%. The exact answer depends on your specific situation — the numbers above are a strong starting point, but the right next step is to plug in your actual figures.
For a deeper analysis, use one of the related tools below — they take your specific income, debt, location, and goals as inputs and produce a tailored answer.