Dan Posted October 11, 2008 Author Posted October 11, 2008 I know you probably know this, but when you get bumped to a higher tax bracket, it doesn't tax your entire income at that tax bracket. Only the amount by which you go over. So for example let's say you make 97,000 a year and your tax bracket is 25%. If the health insurance is taxed and let's say it cost 8,000. Once you hit the magical 100,000 whoch maybe put's you in the 31% tax bracket, you don't pay 31% on 105,000. You only pay 31% on the 5,000 that you go over. The initial 100,000 is at 25%. Yeah I know I simplified it, but you have levels, and the income at those levels is taxed at that level. Any amount over is tax at the next level, but only the amount your over by, not your entire income. Very interesting. I honestly didn't know that. I readily admit there are some things in life I have little or no knowledge of: tax code is one of them. Not that I worry alot about taxes - I just pay whatever the tax man tells me to pay. That does change the math quite a bit though.
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