Tax question

[Nanu57v]

So for some odd random reason I was thinking about taxes. I was estimating our cost, and found out that my husband and I will be right on the border between the 15% and 25% tax bracket after deductions. I thought, we need to keep track of this, because if we are close, it would make sense to give away more money to keep us in the lower bracket.

But, as I read more, it appeared that you are only taxed at the higher rate for the amount over. So if we are $500 over the limit for 15% we are only taxed at 25% for that $500, and 15% for the rest. Can anyone verify this? Obviously I have a while.

 

[BuckNaked]

Correct. 25% for the $500, 15% for the amount between the 10% & 15% brackets, and 10% for the first $15,000 or so (filing jointly).

 

[Nanu57v]

I wonder where I got my first thinking from...the you are taxed the whole thing at the higher bracket thinking.


Thanks for the response!!!

 

[Mrs.Toad]

It's a pretty common misunderstanding.

 

[BuckNaked]

It's a pretty common misunderstanding.

Yep - I even saw them make that mistake on a episode of "West Wing". I loved that show, but I had to roll my eyes at that one.

 

[happy dude]

I wonder where I got my first thinking from...the you are taxed the whole thing at the higher bracket thinking.


Thanks for the response!!!

I hear that if Obama gets elected, he's going to change it to where you'd pay 25% on all of it.


just kidding. just trying to get into the spirit.

 

[Nanu57v]

I hear that if Obama gets elected, he's going to change it to where you'd pay 25% on all of it.


just kidding. just trying to get into the spirit.

I totally believed you! My jaw dropped.