Benefit of Average tax rate :
what is the benefit of calculating Average tax rate and can you give me an example plaese??
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Average tax rate gives you a broad view of the percentage of your income that goes towards taxes.
Let's say an individual has a total income of $50,000 and pays $10,000 in taxes. The average tax rate would be calculated as follows:
Average Tax Rate= Income Tax/EBT
Average Tax Rate = $10,000/$50,000
Average Tax Rate: 0.20
This means that, on average, 20% of the individual's income goes towards taxes.
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