Effective Tax Rate
The Effective Tax Rate is calculated after the Monte Carlo analysis has run, these numbers have no impact on the plan results. i.e. the Effective Tax Rate is calculated using the Total Income Taxes / Total Gross Taxable Income.
Effective Tax Rate = Total Income Taxes / Total Gross Taxable Income
(Total Income Tax: Tax on Gross Income + Tax on Gross Tax-Deferred Distribution)
Marginal Tax Rate
The Marginal Tax Rate is the percentage of tax applied to your income for each Tax Bracket in which you qualify. In essence, it is the percentage taken from your next dollar of taxable income above a pre-defined income threshold. These tax brackets are shown in the Profile > Taxes > Marginal Tax Bracket
Comments