Example
Input: 8% Return, 25% Tax
Result: 6% Effective
Step-by-Step Guide
- Return: Nominal gain %.
- Tax: Your bracket %.
- Effective: Real return.
What is After-Tax Return Calculator?
Adjusts your nominal rate of return by your tax bracket to show actual growth.
⚠️ Note: This tool provides financial estimates. It is not a substitute for professional advice. Always verify with a certified accountant or advisor.
How it Works
1. State 'Return %'.
2. Specify 'Tax Rate %'.
3. Result is Return * (1 - Tax Rate).
FAQ
Why calculate this?
Taxes significantly drag down compound growth.
Capital gains rate?
Long-term is usually 15% or 20%; short-term is income rate.
Tax-deferred accounts?
Use 0% tax for growth phase (pay later).
Roth accounts?
0% tax (already paid).
Nominal vs Real?
Real usually also accounts for inflation.
Conclusion
It's not what you make, it's what you keep. High-yield investments in taxable accounts may yield less than tax-free municipal bonds once the IRS takes its cut.