Ebay rant...

pishta said

One year I made a little more than I usually do and I just made the next higher tax bracket. I got dinged way more than made doing the OT! My tax person said if that happens again, make a few Goodwill runs or charitable contributions to get your gross income right under the bracket. It may cost you a few hundred but could save thousands on your tax bill.

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If you get bumped to a next higher tax, isn't only the amount you earned that is over the tax bracket threshold taxed at that higher rate??? For instance, if the 24% bracket is from $85k-$163, and your taxable income is $90k, only $5k is taxed at 24%, right? Whereas $85k of the $90k is taxed at the lower tax rates accordingly (10%, 12%, 22%). That's my understanding at least.