Originally Posted by
Chrius
I have a question about getting put in a 'lower tax bracket'
Is that a state tax thing? idk, I'm in Texas with no state income tax
I'm no expert so correct me if I'm missing something, but for federal taxes, less income (or reduced via stu loan interest payments, which are nice and I do believe caps at $2500 ) won't put you in a meaningful lower tax bracket.
e.g. this year a single person with an AGI of $36,250 is in the 15% bracket and somebody making $1 more is in the 25% bracket. But that doesn't mean they pay $5437.5 and $9062.50 respectively.
They will pay - 10% of the first $8925, 15% of the next $27325. and the 2nd person pays 25% for the next amounts, which is $1 in this example.
So their taxes are $4991.25 and $4991.50 which is a lot different that $5437.5 and $9062.50 when you just apply 15%/25% across the board.