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Should we use effective tax rate or tax brackets ?

Posted: Fri Aug 31, 2018 4:33 pm
by texbruin
For Investment Tax Rate and Income Tax Rate, should we use tax brackets or effective tax rate ? I'm assuming the latter since it reflects net deductions and directly impacts cash flow.

Re: Should we use effective tax rate or tax brackets ?

Posted: Fri Aug 31, 2018 5:58 pm
by jimr
Generally it makes the most sense to use an average or effective tax rate. Also, don't forget to account for any state or local income taxes that you'll have to pay.