Reply To: Tax Brackets

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SherrieL did an amazing job of explaining how the tax brackets work, but as a kind of direct response to the indirect question, is it seems like you were trying to ask if you would be better off accepting or not accepting the pay raise. The answer for that is that you are almost always better off accepting the pay raise. The only time that your after tax income would go down because you accepted a pay raise is if you were receiving an income dependent tax credit (such as the earned income credit) that you would no longer be eligible for, but even then, the circumstances would have to be really specific for the pay raise not to completely offset it.