How Do Tax Brackets Actually Work?

Have you ever worried about getting a raise because it could “push you into a higher tax bracket”? Are you confused by income tax brackets in general? In this video, we’ll dispel some myths around taxes. We’ll also explain how tax brackets work and how they determine what you’ll actually end up paying in taxes.


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[AdvisorJohnDowns]

This was well done! I remember when my father, an autobody painter, said, "I stop working each week at 100 labor hours because my tax rate goes up." How much did that mindset cost him over the years by not understanding marginal rates!

[mattprince]

So your raises get negated. As soon as your income gets into the next bracket it gets taxed higher. Basically you end up in the same place.

[ctrlaltesc]

but doesn't seem kinda unfair how the additional raise (for example u get a raise of 10k which fall into the 22% bracket) the raise only get taxed at rate of 22%. so if somebody got a raise of 30k both of you will get the same tax rate 🤔???