What is Marginal Tax Rate?
Quick definition
Marginal tax rate is the tax rate applied to your next dollar of taxable income.
Tax & payInvestingGeneral
Overview
In property models, marginal tax rate helps estimate the tax effect of rental profit or loss changes.
Auto-estimated rates are useful for planning, while manual mode can reflect known personal tax assumptions.
Why it matters
- Strongly influences estimated tax benefit or tax cost outcomes.
- Incorrect rate assumptions can distort after-tax cash flow interpretation.