It’s Tax Time – do you know what your top “tax bracket” is?  Why should you even care?  If you know your tax bracket is, say 15%, and you work a lot of overtime, some of your overtime earnings could be pushed up into the 25% tax rate.  Your realized “extra income” could be taxed at $25 for every $100 you earn instead of $15 tax on your base income.

As your income increases up to the highest tax bracket of 39.6%, more taxes are owed not only because of higher tax brackets, but also due to phase-outs of the personal exemption and many common deductions; the Alternative Minimum Tax (AMT);  an increased capital gains tax of 20%, an additional 3.8% tax on investment gains to help support the Affordable Care Act (on top of the increased capital gains tax). And on and on…

The tax code is very complex and as your income increases, your personal finances, including taxes will become more and more complicated.