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Saturday 17 October 2026 09:23:40 GMT
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Avoid this common tax mistake📉 This is how tax brackets work in the USA. Instead of ALL your income being subject to the tax rate of the highest bracket you’re in, your income is initially taxed at the lowest tax bracket until it hits the limit for that bracket, then the next part of your income is taxed at the next tax bracket’s rate, and so on until your income tops out. To use the income of $101k in this video as an example (EXCLUDING the standard deduction - that’s a topic for another video): - The first $11,600 of Kevin’s income would be taxed at 10% ($1,160 taxes owed) - The next $35,550 would be taxed at 12% ($4,266 taxes owed for this segment) - The next $53,375 would be taxed at 22% ($11,743 taxes owed for this segment) - & the final $475 of his income would be taxed at 24% ($114 taxes owed for this segment) To get his final tax bill of $17,283, you’d add up the taxes he owes at each segment. Though, this is assuming he doesn’t contribute to any retirement accounts OR take the standard/itemized deductions (that’s a topic for an entirely different video). This isn’t the easiest thing in the world to understand, so let me know if you have any questions! Appreciate you! -Nick . . . . . . Disclaimer: This content is purely educational in nature and is NOT intended to be financial or tax advice. Consult with a qualified professional who understands your specific situation before making any financial decision. Nick holds the CFP® designation, and had a career as a financial planner, but does not currently advise clients and solely focuses on creating educational financial media. . . . . . . #moneytok #PersonalFinance #financetips #taxes
Avoid this common tax mistake📉 This is how tax brackets work in the USA. Instead of ALL your income being subject to the tax rate of the highest bracket you’re in, your income is initially taxed at the lowest tax bracket until it hits the limit for that bracket, then the next part of your income is taxed at the next tax bracket’s rate, and so on until your income tops out. To use the income of $101k in this video as an example (EXCLUDING the standard deduction - that’s a topic for another video): - The first $11,600 of Kevin’s income would be taxed at 10% ($1,160 taxes owed) - The next $35,550 would be taxed at 12% ($4,266 taxes owed for this segment) - The next $53,375 would be taxed at 22% ($11,743 taxes owed for this segment) - & the final $475 of his income would be taxed at 24% ($114 taxes owed for this segment) To get his final tax bill of $17,283, you’d add up the taxes he owes at each segment. Though, this is assuming he doesn’t contribute to any retirement accounts OR take the standard/itemized deductions (that’s a topic for an entirely different video). This isn’t the easiest thing in the world to understand, so let me know if you have any questions! Appreciate you! -Nick . . . . . . Disclaimer: This content is purely educational in nature and is NOT intended to be financial or tax advice. Consult with a qualified professional who understands your specific situation before making any financial decision. Nick holds the CFP® designation, and had a career as a financial planner, but does not currently advise clients and solely focuses on creating educational financial media. . . . . . . #moneytok #PersonalFinance #financetips #taxes

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