Effective Tax Rate

The effective tax rate is simply a way of representing the actual rate that an individual pays in income taxes.  The effective tax rate is determined by dividing the taxpayer's tax liability by the individual's pre-tax income or gross income.

Tax Liability / Gross Income = Effective Tax Rate

A pilot or flight attendant's tax liability is dependant on his or her tax bracket and taxable income, which in turn are related to several factors including:

• Above-the-Line Deductions
• Below-the-Line Deductions
• Itemized Deductions
• The Standard Deduction
• Adjusted Gross Income
• Alternative Minimum Tax

In other words, determining a pilot or flight attendant's effective tax rate cannot be accomplished until their entire tax return is completed and the tax liability is determined.  But, the effective tax rate will never by higher than the taxpayer's tax bracket.