Month: February 2020

So, What Income Tax Bracket are You In? This is Not a Trick Question.

Tom Kjar

You pay too much in taxes not to read this.

The U.S. uses a progressive income tax system. That means higher income tax rates generally apply to people with higher incomes. Keep in mind we’re talking about taxable income (income after allowed deductions) not gross income (the amount you get paid). Go online to find the new (as of Jan. 2019) brackets for married and single filers.

“Being ‘in’ a tax bracket,” notes NerdWallet, “doesn’t mean you pay that federal income tax rate on everything you make.” Here are a couple of examples:

 A single (unmarried) federal income tax filer with $32,000 in taxable income. That person is in the 12 percent tax bracket but wouldn’t actually pay 12 percent of the full $32,000. Instead, s/he will pay 10 percent on the first $9,525 and 12 percent on the rest.

An individual with $50,000 in taxable income will pay 10 percent on the first $9,525, 12 percent on the chunk of income between $9,526 and $38,700 and 22 percent on the rest.

There are seven tax brackets, from 10 percent to 37 percent of taxable income. So, why is this important? Because it’s your money. Knowing this stuff will make you smarter about your money and where it goes. And, while it won’t take away all the pain, knowing things like your income tax bracket will make writing the check to Uncle Sam on April 15th a little less painful. Not!

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Open Your Eyes to a Credit Union. No, really. Take a look.

Tom Kjar

Ever looked right at something you needed and not seen it? Be honest. We’ve all done it. Sometimes we don’t see the very thing that will help us in a particular situation. It’s kinda’ like that with credit unions, including ours.

A friend of my wife’s was lamenting the fact she’d been turned down for a debt consolidation loan at three banks because her credit score was “iffy.” Now, she knows my wife is married to the president of a credit union. We’ve even talked banking stuff with her. Did she apply for a loan at Creighton Federal? Yes, but only after my wife reminded her who she’s married to.

Long story short, she got her loan. We upped her credit score by replacing two credit cards with our lower interest rate card and consolidating a bunch of old debt. It’s easy when you know where to look. We do. So why didn’t she come to us in the first place? “You’re not a bank. I didn’t think about you,” she said. I suggested she watch FI-Q Lesson 11 in our video education series.

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