What’s The Maximum You Can Make In A Year Without Being Raised Into A Higher Tax Bracket?

Under United States income tax law, the answer depends on your filing status. Also, the tax brackets are adjusted each year for inflation. Here are the tax brackets for a single individual in 2019. From the table, you can see that you can have $9,700 of taxable income in 2019 without being raised into a higher tax bracket. But there’s a standard deduction of $12,200 (also adjusted each year for inflation), so you can actually make $21,900 of gross income, giving you $9,700 of taxable income, before being raised into the next higher tax bracket of 12 percent. What if you make $21,901, giving you taxable income of $9,701? Does that mean that all of your income is now taxed at 12 percent, rather than at 10 percent? No! Read the second line in the table: “If [taxable income] is over $9,700 but not over $39,475, the tax is $970.00 + 12% of the amount over $9,700.” So the tax on taxable income of $9,701 works out to $970.12. Only that last dollar is taxed at the higher 12 percent rate The IRS publishes tables with the instructions to the form 1040 in which the tax is computed without the need for any arithmetic. The table shows taxable income in increments of $50 with the tax computed on taxable income at the midpoint and rounded to the nearest dollar. The table shows that if taxable income is at least $9,700 but not more than $9,750, the tax is $973. This is the tax you get if you use Schedule X to compute the tax on taxable income of $9,725. So now you know the levels of income that will raise you to the next higher tax bracket. More importantly, you know that being raised to the next higher bracket does not change the tax on your first dollars of income. It only affects your next dollars of income.

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