# A basic question about income tax brackets **URL:** \ **Category:** Factual Questions\ **Created:** [November 27, 2024, 5:09pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857 "2024-11-27T17:09:59Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Mean\_Mr.Mustard](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mean_mr.mustard/32/3865_2.png) [@Mean\_Mr.Mustard](https://boards.straightdope.com/u/Mean_Mr.Mustard)\ **Post date:** [November 27, 2024, 5:09pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/1 "2024-11-27T17:09:59Z")
I can’t seem to find a straightforward answer to my straightforward question, so here we are. Suppose I am in the 12% income tax bracket if my Adjusted Gross Income is less than $60,000. And If my AGI is $60,000 or more, that would bump me up to the 15% bracket. Now, whoops, it looks like my AGI is $70,000. If this were the case, am I paying 12% on $60,000 and 15% on $10,000? Or, am I paying 15% on $70,000? Thanks! mmm ---
**Author:** ![Schnitte](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/schnitte/32/9033_2.png) [@Schnitte](https://boards.straightdope.com/u/Schnitte)\ **Post date:** [November 27, 2024, 5:13pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/2 "2024-11-27T17:13:13Z")
The basic idea of a tax bracket is that you pay the tax rate of that bracket only on the income in that bracket. So in your example, you pay the 15% rate only on the $10,000 exceeding the threshold of the lower bracket. Otherwise, it would frequently happen that an increase in gross income reduces your net income. ---
**Author:** ![Mean\_Mr.Mustard](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mean_mr.mustard/32/3865_2.png) [@Mean\_Mr.Mustard](https://boards.straightdope.com/u/Mean_Mr.Mustard)\ **Post date:** [November 27, 2024, 5:17pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/3 "2024-11-27T17:17:20Z")
Ah, that is what I suspected/hoped for. I know someone wise would step up. Thanks mmm ---
**Author:** ![Reply](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/reply/32/15952_2.png) [@Reply](https://boards.straightdope.com/u/Reply)\ **Post date:** [November 27, 2024, 5:24pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/4 "2024-11-27T17:24:40Z")
To be fair, I think this is a commonly misunderstood part of our tax scheme. I suspect it’s often weaponized in politics too. It’s the kind of thing they really should be teaching in school but don’t ☹ ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [November 27, 2024, 5:33pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/5 "2024-11-27T17:33:34Z")
> [@Mean\_Mr.Mustard](#): > > If this were the case, am I paying 12% on $60,000 and 15% on $10,000? No AGI is BEFORE the standard deduction. Much of that $60,000 is taxed at 0%. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [November 27, 2024, 6:17pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/6 "2024-11-27T18:17:23Z")
True. But it’s not clear to me the OP meant AGI in its correct technical meaning or was (mis-) using it as shorthand for “the income amount I pay taxes on.” OP: the correct buzzword for “the income amount I pay taxes on” is “taxable income” or TI. ---
**Author:** ![We\_re\_wolves\_not\_werewolves](https://avatars.discourse-cdn.com/v4/letter/w/838e76/32.png) [@We\_re\_wolves\_not\_werewolves](https://boards.straightdope.com/u/We_re_wolves_not_werewolves)\ **Post date:** [November 27, 2024, 6:38pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/7 "2024-11-27T18:38:49Z")
here is the best website I’ve seen that gives you a basic idea of what slivers of income will be taxed at what percentages. Just input your regular and capital gains income. > **[Understanding Tax Brackets: Interactive Income Tax Visualization and...](https://engaging-data.com/tax-brackets/)** > > This interactive, visualization shows you how your income is split into the various tax brackets for both regular and capital gains taxes. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [November 27, 2024, 7:22pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/8 "2024-11-27T19:22:35Z")
Despite my tax return being 40+ pages long, this website calculated my tax within $2000. ---
**Author:** ![Mean\_Mr.Mustard](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mean_mr.mustard/32/3865_2.png) [@Mean\_Mr.Mustard](https://boards.straightdope.com/u/Mean_Mr.Mustard)\ **Post date:** [November 27, 2024, 7:28pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/9 "2024-11-27T19:28:34Z")
> [@Mighty\_Mouse](#): > > No AGI is BEFORE the standard deduction. Much of that $60,000 is taxed at 0%. > [@LSLGuy](#): > > OP: the correct buzzword for “the income amount I pay taxes on” is “taxable income” or TI. Understood, thanks. mmm ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [November 27, 2024, 7:30pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/10 "2024-11-27T19:30:14Z")
> [@Mean\_Mr.Mustard](#): > > If this were the case, am I paying 12% on $60,000 and 15% on $10,000? Yes, except even better than that. Assuming a joint return- You pay 10% of the first TAXABLE $23K Then 12% from $23K to $94k Then 22% over 94k (higher rates continue up to 37% starting at $731K. > **[2024 and 2025 Federal Tax Brackets and Income Tax Rates - NerdWallet](https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets)** > > The seven federal income tax brackets for 2024 and 2025 are 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your bracket depends on your taxable income and filing status. There is no such thing as a raise putting you just into a higher tax bracket thus you earn less net. That isafter the standard deduction amounts for 2024 being: $29,200 – Married Filing Jointly $14,600 – Single. So a married couple pays 0 up to $29,200. Thus your AGI of $70K as a MFJ= 0 up to $29K, then 10% for the next $23K, then 12% on the remainder. ---
**Author:** ![DavidNRockies](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidnrockies/32/6279_2.png) [@DavidNRockies](https://boards.straightdope.com/u/DavidNRockies)\ **Post date:** [November 27, 2024, 7:30pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/11 "2024-11-27T19:30:33Z")
Fairly concise … JFTR: > **[Marginal Tax Rate: What It Is and How To Determine It, With Examples](https://www.investopedia.com/terms/m/marginaltaxrate.asp)** > > The marginal tax rate is what you pay on your highest dollar of taxable income. The U.S. progressive marginal tax method means one pays more tax as income grows. ---
**Author:** ![Mean\_Mr.Mustard](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mean_mr.mustard/32/3865_2.png) [@Mean\_Mr.Mustard](https://boards.straightdope.com/u/Mean_Mr.Mustard)\ **Post date:** [November 27, 2024, 7:35pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/12 "2024-11-27T19:35:18Z")
Since we’re talkin’ taxes… I’ve been selling a lot of stuff on eBay, enough to warrant a 1099. Because of this I plan on having my taxes prepared this year. When I go see my friendly tax preparer, what do I need to bring with me, eBay-wise? Specifically, can I just provide the numbers alone ($200 spent on packaging in 2024, $600 spent on postage, etc.)? Or, should I provide actual documentation for _each_ expense (a stack of Amazon receipts, for example). mmm ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [November 27, 2024, 7:42pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/13 "2024-11-27T19:42:06Z")
> [@Mean\_Mr.Mustard](#): > > When I go see my friendly tax preparer, what do I need to bring with me, eBay-wise? > > Specifically, can I just provide the numbers alone ($200 spent on packaging in 2024, $600 spent on postage, etc.)? > > Or, should I provide actual documentation for _each_ expense (a stack of Amazon receipts, for example). The major item is how much you paid for the items. Then costs. Postage and materials can be just a total. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [November 27, 2024, 7:44pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/14 "2024-11-27T19:44:08Z")
If those are really illustrative numbers, just a sheet of paper with those handwritten on them should suffice. ---
**Author:** ![thelurkinghorror](https://avatars.discourse-cdn.com/v4/letter/t/7c8e57/32.png) [@thelurkinghorror](https://boards.straightdope.com/u/thelurkinghorror)\ **Post date:** [November 27, 2024, 7:49pm UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/15 "2024-11-27T19:49:06Z")
A tax preparer doesn’t need your receipts, and it would cost you a lot if you just bring them a stack to go through, if they accept you at all. [Here’s Schedule C](https://www.irs.gov/pub/irs-pdf/f1040sc.pdf). Note how section 2 parses out a lot of the stuff by category. If you can prepare an Excel that summarizes the total in each category if applicable, it helps a lot. If some are a mystery to you, you can ask them. Line 27a/48 is a big catchall for eBay based businesses. Then all the receipts you should keep yourself if you ever need them as evidence. ---
**Author:** ![Mean\_Mr.Mustard](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mean_mr.mustard/32/3865_2.png) [@Mean\_Mr.Mustard](https://boards.straightdope.com/u/Mean_Mr.Mustard)\ **Post date:** [November 28, 2024, 12:53am UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/16 "2024-11-28T00:53:28Z")
Very helpful info, thanks. Another scenario that I would like to get your perspectives on: Suppose that, as a youth, I was given multiple comic books every year. I’ve kept them in pristine condition and realize, as an adult, that they are worth a good amount of money. So I sell them. I gross, say, $5,000. My question: Is this 5k really considered _income_? That I have to pay _taxes_ on? Is there a (legal) loophole to get around this insanity? mmm ---
**Author:** ![Horatius](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/horatius/32/3572_2.png) [@Horatius](https://boards.straightdope.com/u/Horatius)\ **Post date:** [November 28, 2024, 1:09am UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/17 "2024-11-28T01:09:15Z")
> [@Reply](#): > > To be fair, I think this is a commonly misunderstood part of our tax scheme. I suspect it’s often weaponized in politics too It’s absolutely misunderstood by lots of people. This is why you hear people turning down a raise “because it will put them in a higher tax bracket”. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [November 28, 2024, 1:28am UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/18 "2024-11-28T01:28:09Z")
You made the decision to convert a gift into money. You could have burned the comics. You could have done all sorts of things. Instead, you made the decision to convert them into money. Did you get $5,000? Yes. Is that $5,000 you didn’t have before? Yes. Then it’s taxable income. Nothing insane about it. ---
**Author:** ![The\_Other\_Waldo\_Pepper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/the_other_waldo_pepper/32/12370_2.png) [@The\_Other\_Waldo\_Pepper](https://boards.straightdope.com/u/The_Other_Waldo_Pepper)\ **Post date:** [November 28, 2024, 1:44am UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/19 "2024-11-28T01:44:40Z")
> [@Exapno\_Mapcase](#): > > You made the decision to convert a gift into money. You could have burned the comics. You could have done all sorts of things. Instead, you made the decision to convert them into money. > > Did you get $5,000? Yes. Is that $5,000 you didn’t have before? Yes. Then it’s taxable income. What happens if he instead trades me those comics for, say, some bottles of wine? ---
**Author:** ![Mean\_Mr.Mustard](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mean_mr.mustard/32/3865_2.png) [@Mean\_Mr.Mustard](https://boards.straightdope.com/u/Mean_Mr.Mustard)\ **Post date:** [November 28, 2024, 2:09am UTC](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857/20 "2024-11-28T02:09:33Z")
> [@Exapno\_Mapcase](#): > > You made the decision to convert a gift into money. You could have burned the comics. You could have done all sorts of things. Instead, you made the decision to convert them into money. > > Did you get $5,000? Yes. Is that $5,000 you didn’t have before? Yes. Then it’s taxable income. Nothing insane about it. Fair enough. Now, say, I just purchased these comics last year, paid $5,000 for them. But now I need the money, so I eBay them and receive $5,000. Still considered income, I suppose. Still taxable, I’m sure. mmm [Next page](https://boards.straightdope.com/t/a-basic-question-about-income-tax-brackets/1010857.md?page=2)