Comments on: Income Tax Buckets Not Income Tax Brackets

By: Steve

Steve — Wed, 24 May 2017 01:40:12 +0000

In reply to AnnieG. No, sorry, but that's not right. Only that last dollar would be subject to 15% rate. So the tax rises by $.15.

By: AnnieG

AnnieG — Tue, 23 May 2017 14:31:00 +0000

That discounted rate bucket is a funny bucket, though.

If your last example couple had received just $1 more in qualified dividend income ($56751 vs $56750), they would pay 15% tax on $18550 + $56751. So their tax would jump from $0 to $11295. Quite a change for $1 extra income.

By: Steve

Steve — Thu, 09 Mar 2017 00:12:24 +0000

In reply to Expat. Expat, I agree there's a limit. I.e., the bucket doesn't have a hole in its bottom.

By: Expat

Expat — Fri, 03 Mar 2017 17:36:26 +0000

Came here via Finance Buff link, and agree a nice explanation, but..

‘lets you avoid paying US income taxes on income you earn outside the country.’

Uh, no. There’s a ceiling (or bucket size) to that, and everything above/overflowing is taxed at the high rate, thanks to Chuck Grassley.