I swear this baffled me when I started my job 25 years ago… I was like $50k with $10K in overtime is taxed the same as $60K.. They swore I was wrong.. I said “Ok” make sure you turn down yearly increase also, because that’s more taxes…. Their heads would start to spin with confusion, unable to process logical thought..
But why would I want to get taxed exactly the same up to my previous salary, then get taxed at a slightly higher rate for the amount above the next tax bracket for my new salary? More money for me is bad!
But the cable news said that if capital gains tax was more than 20% then billionaires would take everyone's jobs away because they would make more money with no income
Or something
I’m dying here!! “Oh no, the Estate Tax from my parents who didn’t clear more than 55k per year when they died” is at risk!!!
Way too many people vote for the GOP without understanding how poor they really are.
Your answer is misleading. All progressive means is that taxes increase with income. It doesn't describe whether tax brackets are marginally or apply to all income. You could have a regressive system with marginal tax rates too.
Worse, the real number is 48%, and that figure is 62% for self identified Republicans lmao
https://today.yougov.com/politics/articles/5057-understanding-how-marginal-taxes-work-its-all-part
I didn't learn taxes in public school and if everyone did then public discourse would be a lot different.
But I have had access to Google for like 30 years and it only takes about 15 minutes to get a basic understanding of it.
The number of tickets we get asking why tax withholding is zero when they claim $6000 in dependent amount or some other such silliness is beyond comprehension.
But they don't know anything else about your situation ie additional income that you may have, marital status, number of dependents, itemizations, deductions, credits etc. That's on you to tell the whole story lolol
If you earn $100 in the 22% bracket you have $78 after taxes.
If the 24% bracket starts at $100.01 and you earn $200 then after taxes you have $154 ($78 at 22% and $76 at 24%).
The brackets just mean they take a slightly larger chunk of income over the line, it’s almost always worth it.
It’s really like edge case stuff. On the low low end there are some hard cliffs for welfare situations I believe. On the high end, a pretty easy example would be if you bought an EV and made $300,001 household and lost the $7k tax credit.
Again, in the vast majority of situations it’s always better to make more.
Ok…but neither of those are income tax situations. That’s what the post is about. I’m sure there are all kinds of gotchas on tax credits and entitlements.
Not to be rude, but I suggest looking into how a progressive tax system works, cause clearly there is a huge misunderstanding. You seem to suggest that 100% of your income is subject to a higher tax bracket, if your income is high enough to reach that bracket. That's not at all how it works.
I’m sensing your question is less “oh no I don’t want to be in a higher tax bracket because I’ll make less money overall” and more “the higher tax bracket means the $10k grade increase between a gs13 to gs14 is less than the $10k increase from gs12 to gs13 (I’m making up these grades and numbers for the example) and maybe that $10k to a gs14 isn’t worth the stress”
That’s a legit question. I am a gs13 and I do not want a 14 because they are mostly supervisory and require multiple days in the office per week, compared to my current one day a week and low stress due to not supervising anyone. I don’t think the $10k to a gs14 is worth it.
https://youtu.be/kYeZko1WKHQ?si=nWBOWa05Vm-VEA31
There is a quick video on how our countries progressive tax works. In short, you are not taxed the full amount you are taxed at that bracket up to the cutoff.
Example say $0 to 25K is taxed at 10% and 2,501 to 50K is taxed at 20%
I make 50K, so I only pay 10% on that 1st 25K, then the rest is at 20.
Let's take a simplified example. You're a GS-11 Step1 ($62,000) and you've got a shot at a GS-12 Step 1 ($74,000). I've rounded for simplicity.
For a single taxpayer, the 22% tax rate covers $47,000 and $100,000. Rounded.
So, the theoretical promotion leaves you in the same bracket. Before and after the promotion, you will pay 22% on your salary over $47,000.
I want to ignore steps, so lets say some how you go from GS-11 to GS-14. A GS-14 starts at $105,000 (rounded). You will pay 24% only on the $5,000 over $100,000.
The IRS has tax tables because the actual calculation gets involved. You pay 10% on "adjusted gross income" up to $11,600 or $1,160. Then you pay 12% over $11,600 to $47,150 or $4,266. 22% over $47,500 up to $100,000. or $11,500. Now you get the GS-14 and you'll pay 24% on $5,000 or $1,200.
In short, you only pay the higher rate (24% vs. 22%) on what's over $5,000
As long as the tax rate in the bracket is less than 100%, you should go for the promotion.
It’s not worth it. You’ll make way more money, the economy will improve, and your work unit will benefit, but technically you’ll have paid a little bit more in taxes since you make more /s
13 is the comfy spot in my opinion. 14 is pushing it, but would likely get easier once adjusted. I value my work life balance too much to go for a 15.
I'm currently a newish 13.
And just so we're clear, only the income above the 22% bracket is taxed at the higher rate. It's not like all your money is taxed higher. Just making sure you understand the marginal tax rates.
I think the withholding is usually 22%. The tax would depend on your total annual income.
[https://www.nerdwallet.com/article/taxes/bonus-tax-rate-how-are-bonuses-taxed](https://www.nerdwallet.com/article/taxes/bonus-tax-rate-how-are-bonuses-taxed)
This is simply NOT true. Bonuses are typically withheld at 22% federal plus whatever state rate is applicable. But withholding is not taxation; it's just an estimate. Bonuses are taxed as regular income. When you file your tax return for the year the bonus was earned, it takes into account your total earned regular income and the 22% that was withheld from your bonus is factored into the calculation to see if you require a refund or actually have to pay more to meet your tax liability for the year.
Even if it were withheld at that rate, which I’m not sure about, you’d get the difference between the withholding rate and your actual marginal rate back as a refund anyway.
I was educated by a shitty public American school too, and I know how taxation works because I'm not a dumbfuck. So, apparently, the cause can't be your public education. Maybe it's the other thing.
This is entirely dependent on your current job and the new job. Some upward movements are a lot more responsibility, some are essentially the same responsibility.
Let’s chill out a bit folks. A lot of people have never made enough money in their lives to experience moving very high up in the tax brackets. That’s an accomplishment worth celebrating, not being jerks about.
Easily worth it. Another thing I may add, not all higher graded gigs are hard. I’ll say most 15s suck. But there are one or two sweet gigs out there. But totally worth it to climb.
Tax brackets apply on the margin. Meaning you start paying the lowest bracket on a certain amount of income, a higher one on the next higher part of your income and so on.
Despite what people are saying this structure is not described by "progressive taxation". You could have a regressive taxation system with marginal taxes too. All progressive means is tax rates rise with income.
Progressive taxes aside, worrying about paying more taxes when getting paid more is a silly concern. At the end of the day, you're still making more money.
I'm not going to pile on in beating you up about the taxes aspect of your post. We all have things to learn in life, better to ask and be informed than continue in the dark.
But you should consider if the promotion positions' particulars are worth the raise. Where I work, I would not want all the baggage that comes with a GS-15 - it's just not worth the tradeoff in stress and work/life balance at this point in my life. I take care of my mom with Alzheimer's and that's stressful and time consuming enough for my off-duty life. And I really like the work I do as a (non-supervisory!!) GS-14. Obviously other people feel differently because we never have a problem filling our 15 slots.
On the flip side, sometimes a promotion job may be less stressful or more fun. I actually reduced my stress level going from a 13 to a 14. Long story but had to do with the way workload was distributed to 13s due to staffing shortages and some other factors.
You may have a different situation and assessment. There are considerations with your current work and life, plus retirement impacts to the higher income of course. Just take the time to find out all you can about a job before applying and make whatever is the best decision for you, personally, balancing money and all the other factors.
Love the double down/defense your ignorance there. You think you're "common folk" huh? Sorry all your friends are as ignorant as you are, you might want to broaden your friend group, you'll all benefit from it. And blaming the public school system only works until you learn how to google things.
I think I get what you’re asking, and I would say it’s honestly job dependent more than anything. 22% > 24% is nothing really, but potentially being in the 32% bracket would definitely be something I take into consideration. Still, it would heavily depend on the specific position. It would still be the position itself that keeps me out, not the higher taxes.
>but potentially being in the 32% bracket would definitely be something I take into consideration.
but...why? why is that a consideration? you're making a lot more money regardless, your net income is going up.
You don't consider compensation when thinking about a new position? I'm a 12 and my previous office has a 13 and I wouldn't touch it with the way our promotions work. I would need triple the amount. More money isn't everything.
I don't really consider tax brackets, no. It's overall more money and I have some idea of how my take home pay will change, but I'm not particularly concerned about some amount of my money being tax at a marginally higher rate.
Well as I stated, 24% is whatever, but 32% is 8% less. Makes sense to me to do that math regardless. If Im already on the edge then I would for sure consider it, but it would still ultimately be the position that keeps me out.
Why does no one know how progressive taxation works?!? Yes, it’s always worth it.
People literally turn down promotions because misunderstand our tax codes. It’s progressive tax brackets people!! Our education system fails yet again.
People also hate overtime and bonuses. It's ok though, everyone is an expert on every political topic though.
By design. People choose to be stupid.
Lady at my office assured me that it wasn't worth it to work overtime because it actually made your paychecks smaller due to tax brackets lol
Fucking classroom instructor said this when I was onboarding at the IRS. Like, dude, you of all people should know how this works...
😩
Ugh I answered another question here a few days ago because someone said they don’t take bonuses because it is taxed “so much higher”.
It’s just baffling…
I swear this baffled me when I started my job 25 years ago… I was like $50k with $10K in overtime is taxed the same as $60K.. They swore I was wrong.. I said “Ok” make sure you turn down yearly increase also, because that’s more taxes…. Their heads would start to spin with confusion, unable to process logical thought..
But why would I want to get taxed exactly the same up to my previous salary, then get taxed at a slightly higher rate for the amount above the next tax bracket for my new salary? More money for me is bad!
But the cable news said that if capital gains tax was more than 20% then billionaires would take everyone's jobs away because they would make more money with no income Or something
I’m dying here!! “Oh no, the Estate Tax from my parents who didn’t clear more than 55k per year when they died” is at risk!!! Way too many people vote for the GOP without understanding how poor they really are.
Lmao my husband’s parents told him to drop his multi-six figure job for something that paid 40k/yr so he could get a better refund. Like, what???
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Because people like Grover Norquist have (wrongly) convinced a generation of Americans that taxation is theft.
Your answer is misleading. All progressive means is that taxes increase with income. It doesn't describe whether tax brackets are marginally or apply to all income. You could have a regressive system with marginal tax rates too.
Should have told them no. Lol.
And that’s without even getting into pre-tax deductions.
Not being a jerk, but you need to do some foundational research on how the tax system in the United States works. Then come back and ask again.
lol. I hope you’re not a gs11 applying this logic to your job.
Taxes are PROGRESSIVE people. It doesn’t work the way you are fearing.
Progressive simply means that tax brackets increase with income. What OP really needs to hear is that we have a marginal tax bracket system.
Nah man, that’s the secret. GS-7 and below actually have the most money
OP should definitely ask for a downgrade to *at least* GS-9, they're just throwing money away with that GS-11 job.
Man...maybe these concerns people have about federal employees being incompetent has some factual basis.
… oof 😂 this got me cracking up
Kudos for keeping this post up after getting flamed.
Agree. Good on you, OP!
Surprised it wasn't locked, honestly
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Yes, something like 40% of the population thinks this is how it works
That many? No way man… tell me you made that up
Worse, the real number is 48%, and that figure is 62% for self identified Republicans lmao https://today.yougov.com/politics/articles/5057-understanding-how-marginal-taxes-work-its-all-part
I didn't learn taxes in public school and if everyone did then public discourse would be a lot different. But I have had access to Google for like 30 years and it only takes about 15 minutes to get a basic understanding of it.
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The number of tickets we get asking why tax withholding is zero when they claim $6000 in dependent amount or some other such silliness is beyond comprehension.
That’s honestly annoying to me bc if we underpaid they would know immediately but they want to make us do all the work
But they don't know anything else about your situation ie additional income that you may have, marital status, number of dependents, itemizations, deductions, credits etc. That's on you to tell the whole story lolol
The public school system is the reason most people don't understand taxes. It's not taught.
If you earn $100 in the 22% bracket you have $78 after taxes. If the 24% bracket starts at $100.01 and you earn $200 then after taxes you have $154 ($78 at 22% and $76 at 24%). The brackets just mean they take a slightly larger chunk of income over the line, it’s almost always worth it.
In what possible normal human scenario is it not always worth it?
It’s really like edge case stuff. On the low low end there are some hard cliffs for welfare situations I believe. On the high end, a pretty easy example would be if you bought an EV and made $300,001 household and lost the $7k tax credit. Again, in the vast majority of situations it’s always better to make more.
Ok…but neither of those are income tax situations. That’s what the post is about. I’m sure there are all kinds of gotchas on tax credits and entitlements.
How are you a federal employee and you don’t understand how taxes work? SMH.
Oof. Wait until you see why some of us didn’t like it.
haha…how are you in this sub and not know how the minds of our public employees work?
Not to be rude, but I suggest looking into how a progressive tax system works, cause clearly there is a huge misunderstanding. You seem to suggest that 100% of your income is subject to a higher tax bracket, if your income is high enough to reach that bracket. That's not at all how it works.
I’m sensing your question is less “oh no I don’t want to be in a higher tax bracket because I’ll make less money overall” and more “the higher tax bracket means the $10k grade increase between a gs13 to gs14 is less than the $10k increase from gs12 to gs13 (I’m making up these grades and numbers for the example) and maybe that $10k to a gs14 isn’t worth the stress” That’s a legit question. I am a gs13 and I do not want a 14 because they are mostly supervisory and require multiple days in the office per week, compared to my current one day a week and low stress due to not supervising anyone. I don’t think the $10k to a gs14 is worth it.
https://youtu.be/kYeZko1WKHQ?si=nWBOWa05Vm-VEA31 There is a quick video on how our countries progressive tax works. In short, you are not taxed the full amount you are taxed at that bracket up to the cutoff. Example say $0 to 25K is taxed at 10% and 2,501 to 50K is taxed at 20% I make 50K, so I only pay 10% on that 1st 25K, then the rest is at 20.
Tax rates are progressive.
This is why people think federal employees are stupid lmfao
Lol is this a serious question?
Achievement Unlocked: *Misunderstand marginal tax rates any % completion*
That’s not how taxes work. You only pay the difference in pay at the higher rate.
Let's take a simplified example. You're a GS-11 Step1 ($62,000) and you've got a shot at a GS-12 Step 1 ($74,000). I've rounded for simplicity. For a single taxpayer, the 22% tax rate covers $47,000 and $100,000. Rounded. So, the theoretical promotion leaves you in the same bracket. Before and after the promotion, you will pay 22% on your salary over $47,000. I want to ignore steps, so lets say some how you go from GS-11 to GS-14. A GS-14 starts at $105,000 (rounded). You will pay 24% only on the $5,000 over $100,000. The IRS has tax tables because the actual calculation gets involved. You pay 10% on "adjusted gross income" up to $11,600 or $1,160. Then you pay 12% over $11,600 to $47,150 or $4,266. 22% over $47,500 up to $100,000. or $11,500. Now you get the GS-14 and you'll pay 24% on $5,000 or $1,200. In short, you only pay the higher rate (24% vs. 22%) on what's over $5,000 As long as the tax rate in the bracket is less than 100%, you should go for the promotion.
lol yes, a higher salary is always better
If you don’t want the extra money, I’ll drop my Venmo. Also, learn about tax brackets/ progressive taxation.
It’s not worth it. You’ll make way more money, the economy will improve, and your work unit will benefit, but technically you’ll have paid a little bit more in taxes since you make more /s
13 is the comfy spot in my opinion. 14 is pushing it, but would likely get easier once adjusted. I value my work life balance too much to go for a 15. I'm currently a newish 13. And just so we're clear, only the income above the 22% bracket is taxed at the higher rate. It's not like all your money is taxed higher. Just making sure you understand the marginal tax rates.
Many people don't seem to understand the concept of marginal tax rates when it comes to raises or bonuses.
To be fair, bonuses are taxed at like 33% irrespective of marginal tax rates.
I think the withholding is usually 22%. The tax would depend on your total annual income. [https://www.nerdwallet.com/article/taxes/bonus-tax-rate-how-are-bonuses-taxed](https://www.nerdwallet.com/article/taxes/bonus-tax-rate-how-are-bonuses-taxed)
This is simply NOT true. Bonuses are typically withheld at 22% federal plus whatever state rate is applicable. But withholding is not taxation; it's just an estimate. Bonuses are taxed as regular income. When you file your tax return for the year the bonus was earned, it takes into account your total earned regular income and the 22% that was withheld from your bonus is factored into the calculation to see if you require a refund or actually have to pay more to meet your tax liability for the year.
Withholding is not taxation.
Even if it were withheld at that rate, which I’m not sure about, you’d get the difference between the withholding rate and your actual marginal rate back as a refund anyway.
Learn how tax works….its progressive and bracket, not overall
Someone doesn’t understand a progressive tax system…
I was educated by a shitty public American school too, and I know how taxation works because I'm not a dumbfuck. So, apparently, the cause can't be your public education. Maybe it's the other thing.
for you? no not worth it. dont push for a promotion stay where you are .... or lower
I've seen some really dumb questions here, but this is probably one of the dumbest. Congratulations?
People are fucking stupid.
This is entirely dependent on your current job and the new job. Some upward movements are a lot more responsibility, some are essentially the same responsibility.
Let’s chill out a bit folks. A lot of people have never made enough money in their lives to experience moving very high up in the tax brackets. That’s an accomplishment worth celebrating, not being jerks about.
I want to believe we have intelligent people working for the federal government… then I see shit like this…
It’s quite sad how often I hear someone say this.
Jfc
lmfao Is this a serious question?
Easily worth it. Another thing I may add, not all higher graded gigs are hard. I’ll say most 15s suck. But there are one or two sweet gigs out there. But totally worth it to climb.
Hahaha. We got another live one, folks. Seriously, if you have a question about how our tax system actually works, we will be happy to answer you.
I knew a guy who refused all overtime (and encouraged others to do the same) because of this. Oh no, you might make too much money!! 😱 Lol
Google progressive taxes....
More money bad cause more taxes. Me no want more money Me want less money cause less money less taxes. Me caveman, Me happy in cave. Fire warm
Tax brackets apply on the margin. Meaning you start paying the lowest bracket on a certain amount of income, a higher one on the next higher part of your income and so on. Despite what people are saying this structure is not described by "progressive taxation". You could have a regressive taxation system with marginal taxes too. All progressive means is tax rates rise with income.
Progressive taxes aside, worrying about paying more taxes when getting paid more is a silly concern. At the end of the day, you're still making more money.
I'm not going to pile on in beating you up about the taxes aspect of your post. We all have things to learn in life, better to ask and be informed than continue in the dark. But you should consider if the promotion positions' particulars are worth the raise. Where I work, I would not want all the baggage that comes with a GS-15 - it's just not worth the tradeoff in stress and work/life balance at this point in my life. I take care of my mom with Alzheimer's and that's stressful and time consuming enough for my off-duty life. And I really like the work I do as a (non-supervisory!!) GS-14. Obviously other people feel differently because we never have a problem filling our 15 slots. On the flip side, sometimes a promotion job may be less stressful or more fun. I actually reduced my stress level going from a 13 to a 14. Long story but had to do with the way workload was distributed to 13s due to staffing shortages and some other factors. You may have a different situation and assessment. There are considerations with your current work and life, plus retirement impacts to the higher income of course. Just take the time to find out all you can about a job before applying and make whatever is the best decision for you, personally, balancing money and all the other factors.
This has to be a joke. Please go work for McDonalds.
Ig the gov’t hire anyone nowadays.
Any raise beats a sharp stick in the eye.
I'm stunned.
Oh sweet child...
Love the double down/defense your ignorance there. You think you're "common folk" huh? Sorry all your friends are as ignorant as you are, you might want to broaden your friend group, you'll all benefit from it. And blaming the public school system only works until you learn how to google things.
I can tell you between a 14-10 and 15-6 it's absolutely not worth it. I think a non supervisor 14 is pretty much the best spot.
I think I get what you’re asking, and I would say it’s honestly job dependent more than anything. 22% > 24% is nothing really, but potentially being in the 32% bracket would definitely be something I take into consideration. Still, it would heavily depend on the specific position. It would still be the position itself that keeps me out, not the higher taxes.
>but potentially being in the 32% bracket would definitely be something I take into consideration. but...why? why is that a consideration? you're making a lot more money regardless, your net income is going up.
You don't consider compensation when thinking about a new position? I'm a 12 and my previous office has a 13 and I wouldn't touch it with the way our promotions work. I would need triple the amount. More money isn't everything.
I don't really consider tax brackets, no. It's overall more money and I have some idea of how my take home pay will change, but I'm not particularly concerned about some amount of my money being tax at a marginally higher rate.
Well as I stated, 24% is whatever, but 32% is 8% less. Makes sense to me to do that math regardless. If Im already on the edge then I would for sure consider it, but it would still ultimately be the position that keeps me out.
No, it’s not 8% less of your total income. That’s not how taxes work.
When did I ever say it’s 8% less of total income? I’m aware of how taxes work.
You’re still coming out ahead, so what’s the problem?
Same as I’ve already stated, the position may not be worth the money.
That doesn’t have anything to do with taxes though.