Can you get LESS money from a raise if you reach a new tax bracket?

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  • Can you get LESS money from a raise if you reach a new tax bracket?


Answer #1 | 21/12 2013 18:08
Yes. If your income is right at the top of a bracket and a raise takes you just across that into the next bracket, there is a very small window where your net take home pay could be slightly less.
Positive: 31 %
Answer #2 | 21/12 2013 18:11
Nope. The higher tax rate ONLY applies to the amount that is over the threshhold level for that tax rate bracket. I am completely making up these numbers but you will get my point: Let's say you make $1000/year and the tax bracket up to $1000 is 10%. You will pay $100 in taxes making your net $900/year. Let's say you get a raise to $1010/year and you are now in the 15% tax bracket. Your tax will NOT be 15% of $1010 ($151.50) netting you only $858.50 . Your tax will be 10% of $1000 and 15% of $10 ($100 + $1.50 = $101.50) netting you 908.50. All your income below that threshhold is still taxed at the lower rate for that bracket.
Positive: 25 %
Answer #3 | 21/12 2013 18:13
No. The new tax bracket would apply only to part of the raise. The rest of your salary, as well as part of the raise, would be taxed at the old rate. For example, let's say that you used to make $45,000, and you get a $10,000 raise, and the new tax bracket starts at $50,000. In that situation, $50,000 would be taxed at the old bracket's tax rate, and only $5000 would be taxed at the new rate. You would get all of the money that you were already getting, because the tax on that income wouldn't change, plus you would also get most of the raise (minus whatever the tax on the raise was).
Positive: 5 %
Answer #4 | 21/12 2013 18:16
No more made more taxes withheld BUT will still end up with more NET take home pay check after the taxes are withheld for each pay period during the tax year. Hope that you find the above enclosed information useful. 1221/2013
Positive: 10 %
Answer #5 | 21/12 2013 18:55
the more you make the more your income tax is and of course the more you make the more FICA is withheld but if you get a raise, you should realize some increase in your paycheck
Positive: 10 %
Answer #6 | 22/12 2013 00:22
Repeat after me. 1. The tax rate is NOT 100%. 2. The tax rate applies to the amount that spills into the new tax bracket. It does NOT apply to all of your income. A raise will not cause you to have less money in all.
Positive: 10 %

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