Marginal Tax brackets drive me insane especially my parents constantly misunderstand and think a payrise will make them lose money.
They don’t understand that the tax is only paid on the money earned in that bracket. So going up 5% isn’t your total income being taxed an extra 5% its only the money earned on that bracket that is taxed at the higher rate.
There’s technically a spot where making more can cost you money, but that’s well out of reach of normal people. It involves triggering the alternative minimum tax.
Marginal Tax brackets drive me insane especially my parents constantly misunderstand and think a payrise will make them lose money.
They don’t understand that the tax is only paid on the money earned in that bracket. So going up 5% isn’t your total income being taxed an extra 5% its only the money earned on that bracket that is taxed at the higher rate.
There’s technically a spot where making more can cost you money, but that’s well out of reach of normal people. It involves triggering the alternative minimum tax.