Anonymous wrote:I find it easier looking at tax brackets that are written like this:
https://files.taxfoundation.org/20170123140911/TaxFoundation-FF534.pdf

Married Filing Joint Taxable Income Brackets and Rates, 2017 Rate Taxable Income Bracket Tax Owed 10% $0 to $18,650 10% of taxable income 15% $18,650 to $75,900 $ 1,865.00 plus 15% of the excess over $18,650 25% $75,900 to $153,100 $ 10,452.50 plus 25% of the excess over $75,900 28% $153,100 to $233,350 $ 29,752.50 plus 28% of the excess over $153,100 33% $233,350 to $416,700 $ 52,222.50 plus 33% of the excess over $233,350 35% $416,700 to $470,700 $112,728.00 plus 35% of the excess over $416,700 39.60% $470,700+ $131,628.00 plus 39.6% of the excess over $470,700

I think this gives a better idea of how the marginal brackets work.

Except for two things:

1) It doesn't count exclusions/deductions. Ignorant people look at "taxable income" and confuse it with "gross." So, you have to do the exclusion math (i.e. retirement contributions, FSA contributions, health insurance paid for before tax, etc) and deductions (itemized or standard) before you can use this table.

2) This is 2017 rates. 2018 rates are lower. Income brackets changed, too, I think.

Anonymous wrote:Hi. I'm currently negotiating salary increase and am cautious about going into a higher tax bracket. Now, I'm making 105K(gross) What is the income amount to enter next tax bracket for a couple with one child?

Don't worry about the burden of taking a raise and getting into a higher tax bracket.
Just tell your boss to give you the raise but pay the money to me. I'll take the pain for you.
Btw, if at 105k your tax bracket is already too high for you, just send me a donation for 30k, you will fall into the lower bracket.

Anonymous wrote:I don't think you really understand how tax brackets work. Only the marginal income is taxed at the higher rate.

I'm always surprised by how many people don't understand this. I think everyone should have to take a class on basic financial, statistical and tax literacy before graduation from HS. Understand what 15% interest on a CC really means, how tax brackets work, what the odds in powerball really mean.

Anonymous wrote:

Anonymous wrote:Not OP, but people should be nicer. We should encourage some basic financial education in schools. I graduated high school in the 90s so maybe this is done now. I think a lot of young people run into credit problems, and don't know how to best save for retirement etc.

I agree with this. Instead of making fun of OP, we should be furious as Americans that this type of basic financial literacy is not taught in schools!

It is taught in schools. But people choose to listen to fake news propaganda propagated by anti-tax activists.
These conservative pundits tell people:
that the government is evil and is taking their money.
that it is not worth working more to earn more because more of their hard earned money will go to the evil government.

Once people start believing this nonsense, they start ignoring the facts.
I have met many conservatives who believe that taxes discourage people from working more.

Anonymous wrote:Not OP, but people should be nicer. We should encourage some basic financial education in schools. I graduated high school in the 90s so maybe this is done now. I think a lot of young people run into credit problems, and don't know how to best save for retirement etc.

Agreed. I'm not sure that OP's unfamiliarity with tax brackets is any worse than other views I've seen recently on this forum, including:
1- Tariffs are actually good.
2- The market is *definitely* headed for a big correction, so I'm holding cash now.
3- Bitcoin is a reasonable investment vehicle.
4- An affluent household holding $100K in cash as an "emergency fund" is a savvy move.
5- Vanguard is stupid for not offering index funds which do not include stocks that I personally find objectionable.
6- My taxes will go way up under the tax cut bill, since my mortgage interest is more than $10K/year.

OP at least knows enough to realize she doesn't know something she should know.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Others have already stated the obvious.
One of the only reasons you wouldn't want your salary to increase is if it the increase is small and it makes you ineligible for certain deductions.
For example couples with an AGI over 199k cannot contribute to an IRA or Roth IRA.
There are many other deductions and tax breaks that phase out at that income.

If your AGI is 198k and you get a small 2k raise that put you at 200k AGI, this raise may not be worth it, it will cost you more.
But of course if the raise is 10k, you win anyway.

In your case at 105k, you are far away from these figures. Take your raise and enjoy the money.

Are there really phaseouts such that you'd be better off with a lower income? I'm skeptical. Going through a phase out might increase your marginal tax rate, but above 100%?

pp cited being ineligible for a Roth IRA contribution, but there are no income limits for an equivalent backdoor Roth.

The Savers Credit (up to 2k) for contributions to qualified retirement plans. Not available for couples over 55k AGI.
Education Credit (up to 2.5k). Not available for couples over 160k.
The Child Care Tax credit. For 2017, it phaseouts at 110k AGI.

If you are just a few 100 bucks below those thresholds, you should avoid crossing over or it will hurt you.

All of these have gradual phaseouts, so I don't think any would raise your marginal tax rate above 100% over any income range, as claimed.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ugh this is painful OP.

+1. So painful that someone making over 100K a year has literally no idea how basic taxes work.

I work in engineering. We're supposed to be smart, math-savvy people, right?

I once had a colleague tell me that his wife stopped working because her job pushed their whole household into a higher tax bracket, so they actually made less money if she worked.

??????

You think that's bad? I was talking to a guy with an economics degree from William & Mary who made the brilliant pronouncement that every event has a 50/50 chance of happening. I asked him if a plane that takes off from Dulles has a 50/50 chance of landing safely at its destination, and he said "yes" because.....wait for it....either the plane will land, or it won't. Since there are only two options, that means there's a 50/50 chance of one or the other happening.

You can't make this stuff up.