Reply to How many of you JDs do not work anymore because it is not worth it financially?

Forum Index » Off-Topic

Reply to "How many of you JDs do not work anymore because it is not worth it financially?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous]

I don't think so.  She's already in the top income bracket because of DH's income, so[b] all of her income is taxed at the top rate of 35% for federal[/b], plus 8.5% if she lives in DC, plus 7.65 percent payroll taxes, which equals just over 50%.

.[/quote]

No, no, no, no, no! I am consistently amazed at how ignorant people are of MARGINAL TAX RATES. The 35% top bracket only applies to a portion of the family's income. Everyone's first $10,000 is taxed at the same rate. If you are in the 35% bracket, you do NOT pay 35% of your total income in federal income taxes. My family is in the 25% bracket but our effective rate is much lower, maybe 15% once you count all of our deductions, exemptions, and credits.

Here is a quick explanation of how marginal tax rates work: http://www.moolanomy.com/1800/how-do-marginal-tax-rate-and-effective-tax-rate-work/[/quote]

no, the PP is correct.  That is the whole point.  For purposes of deciding whether to work or not, the marginal tax rates are meaningless because you already hit those thresholds with your husband's income.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics