Business / Taxes / Marginal Tax Rate: Because the US income tax system is progressive, your tax rate rises as your taxable income rises through two or more tax brackets. Your marginal tax rate is the rate you pay on the taxable income that falls into the highest bracket you reach: 10%, 15%, 25%, 28%, 33%, or 35%. For instance, if you have a taxable income that falls into three brackets, your would pay at the 10% rate on the first portion, the 15% rate on the next portion, and the 25% federal tax on only the third portion. Your marginal rate would be 25%. However, your marginal tax rate is higher than your effective tax rate, which is the average rate you pay on your combined taxable income. That’s because you’re only paying tax at your marginal, or maximum, rate on the top portion of your income. Keep in mind that your marginal tax rate only applies to tax on ordinary income and does not take into account other tax liabilities — such as realized long-term capital gains which are taxed at your long capital gains rate — or tax credits for which you may be eligible, which may reduce the actual tax you pay.
Marginal Noun Synonyms: borderline, minimal, small, slight, negligible, insignificant, tiny, infinitesimal
Rate Verb Synonyms: measure, pace, gait, speed, velocity, clip
Rate Noun Synonyms: rank, grade, class, classify, evaluate, estimate, calculate, compute, count, reckon, judge, gauge, assess, appraise, measure
Tax Adjective Synonyms: levy, impost, duty, tariff, assessment, tribute, toll, excise, customs, charge, contribution, scot, tithe, octroi, cess, rate(s), dues
Tax Noun Synonyms: assess, exact, demand, charge, impose or levy a tax (on), tithe
Business / Accounting / Effective Tax Rate: A tax rate that reflects the percentage of the actual tax liability to the accounting income generated by the company, that is, net tax liability/financial (book) income before taxes. MORE
Business / Finance / Rate Lock: An agreement between the mortgage banker and the loan applicant guaranteeing a specified interest rate for a designated period, usually 60 days. MORE