Understanding Tax Brackets: The Truth About Getting a Raise
The Truth About Tax Brackets
Have you ever wondered how getting a raise could affect your taxes? In this video, we break down the common misconception about tax brackets and show you why making more money is always better.
How Tax Brackets Work
When you move into a higher tax bracket, only the dollars you earn above a certain threshold are taxed at the higher rate. For example, if you go from a $45k salary to $50k, only the portion above $48,476 is taxed at the higher rate, not your entire income.
Maximizing Your Income
Understanding how tax brackets work can help you make informed decisions about your finances. By knowing that your entire income is not taxed at the highest rate, you can see the true benefit of earning more money through raises or additional income streams.
Don't let the fear of moving into a higher tax bracket hold you back from increasing your earnings. With the right knowledge, you can make smart financial moves that will benefit your bottom line.
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