I know people who still repeat the line that earning more money will push them into a higher tax bracket and they’d end up with less money than if they stayed at their current income.
The higher rate gets charged only on the portion above the threshold. So with those rates someone earning 192k pays ($191k * .24) + ($1k * .32) = $46,100 not ($192k * .32) = $61,400.
Where you can be worse off earning more is if it puts you over a threshold for some social services (food stamps for example) with a hard cutoff rather than progressively lower benefits.
I know people who still repeat the line that earning more money will push them into a higher tax bracket and they’d end up with less money than if they stayed at their current income.
Isn’t this possible? Tax brackets for 2024 I thought for single filer is 24% below 191k and 32% over 191k, isn’t it?
The higher rate gets charged only on the portion above the threshold. So with those rates someone earning 192k pays ($191k * .24) + ($1k * .32) = $46,100 not ($192k * .32) = $61,400.
Where you can be worse off earning more is if it puts you over a threshold for some social services (food stamps for example) with a hard cutoff rather than progressively lower benefits.
Oh man don’t even get me started on that one too. I knew some people that genuinely thought a bonus would make them earn less overall.
If i was a manager and someone turned down a raise/bonus because “tax” reasons, i would seriously evaluate my own managerial skills…
Like, how did i not notice this person is a complete moron and why did i offer them a raise?