for Americans was 18.8%, but for most of us it was lower than that. If you divide American earners into five groups based on income, the lower-earning three groups have an effective tax rate of less than 13%. The fourth group has an effective tax rate of nearly 17%, while the top-earning fifth of the population has an effective tax rate of nearly 24%. After talking with my accountant, I knew that my effective tax rate is roughly 13%.
I hope to continue growing my businesses, which means I'll likely owe more taxes for 2020 than I did for 2019. Knowing about my effective tax rate helps me predict exactly how much, so that I will avoid a massive tax bill at the end of the year. math is simple
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