The Truth About Tax Brackets

"Should I accept this raise or this bonus?"

Popular myth: "Making more money will put me in the next tax bracket! I don't want to pay the higher rate for my entire income...."

Yes, your increased income will be taxed at the higher amount, though NOT your entire income. Tax brackets are portioned at different % rates up to different amounts.

For 2023 tax bracket:
10% is paid on your income from $0 - $11,000
12% is paid on your income from $11,001 - $44,725
22% is paid on your income from $44,726 - $95,375
24% is paid on your income from $95,376 - $182,100
32% is paid on your income from $182,101 - $231,250
35% is paid on your income from $231,251 - $578,125
37% is paid on your income from $578,126 - And up

It always works out better to make more money. You will always have more money in your pocket when you get a raise or a bonus.