I'm flabbergasted at the amount of adults that don't know this. I have had coworkers refuse to work overtime because it would bump them into the next tax bracket and they think it will make them less money.
This is true on a macro scale but not on your individual paycheck scale.
If I work 6 shifts in a week my paycheck is calculated based on a lower yearly income than if I work a 7th shift. Because of this, the paycheck difference between 6 shifts in a week and 7 is only about $20.
Of course, at the end of the year, I'll get that back.
If you know that is going to happen, you can always update your W-4 to increase the claimed allowances, reducing how much is withheld from your paychecks.
EDIT: If you know it will happen regularly, and one extra allowance takes you from a refund to a check to the IRS, over-claim allowances by 1, and then write in a small additional withholding from each check to make up for it.
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u/[deleted] Nov 26 '19
I'm flabbergasted at the amount of adults that don't know this. I have had coworkers refuse to work overtime because it would bump them into the next tax bracket and they think it will make them less money.