Episode Details

Have you ever heard of anyone complaining about making more money? If you have, they probably grumbled about moving up a tax bracket. Many people assume that when they “move up a tax bracket” every dollar they earn is taxed at a new, higher rate leading to lower take-home pay overall.

Thankfully, that isn’t the case. When you “move up a tax bracket” you only pay a higher tax rate on the income above a threshold. The rest of your income is taxed at the same rate (or rates) as before.

In this episode we explain what it really means to move up a tax bracket, how to calculate your tax bill, and the possible downsides of earning more.

Read the full article here.