2356: MONDAY MASTERY - What Really Happens When You Move Up a Tax Bracket? by Robert Farrington

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🗓️ 26 June 2023

⏱️ 9 minutes

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Summary

Robert Farrington of The College Investor talks about what really happens when you move up a tax bracket Episode 2356: MONDAY MASTERY - What Really Happens When You Move Up a Tax Bracket? by Robert Farrington Robert Farrington is a personal finance expert that focuses on helping millennials get out of student loan debt and start investing for their future. He also helps parents make smart choices about college financing options and navigating the complex world of paying for school. He started The College Investor in 2009 as a forum to discuss the myriad of financial issues facing young adults. The original post is located here: https://thecollegeinvestor.com/32204/move-up-tax-bracket/ Visit Me Online at OLDPodcast.com Interested in advertising on the show? https://www.advertisecast.com/OptimalFinanceDaily Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is Optimal Finance Daily, Episode 2356.
0:04.8	What really happens when you move up a tax bracket by Robert Farrington of the CollegeInvestor.com
0:11.4	And I'm your host and personal finance enthusiast, Diana Mariam.
0:15.6	Welcome to another Monday Mastery episode here on Optimal Finance Daily, where each Monday
0:21.2	we take a look at an article that features a more complex personal finance topic.
0:26.6	So with that, let's jump right into this next article and start optimizing your life.
0:36.0	What really happens when you move up a tax bracket by Robert Farrington of the CollegeInvestor.com?
0:43.7	Have you ever heard of anyone complaining about making more money?
0:47.6	If you have, they probably grumbled about moving up a tax bracket.
0:52.2	Many people assume that when they move up a tax bracket, every dollar they earn is taxed
0:57.0	at a new higher rate, leading to lower take-home pay overall.
1:01.2	Thankfully, that isn't the case.
1:03.9	When you move up a tax bracket, you only pay a higher tax rate on the income above a threshold.
1:10.3	The rest of your income is taxed at the same rate or rates as before.
1:15.3	In this article, we explain what it really means to move up a tax bracket, how to calculate
1:20.2	your tax bill, and the possible downsides of earning more.
1:24.7	What does moving up a tax bracket mean?
1:28.0	The United States has a progressive income tax code.
1:31.8	That means that the first dollar you earn is taxed at a lower rate than the last dollar
1:36.0	you earn.
1:37.0	It's important to note that the United States taxes your adjusted gross income or AGI.
1:44.2	Adjusted gross income is all of your income subject to income tax, wages, business profits,
	...

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