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this post was submitted on 10 Jul 2024
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In the US you could absolutely fall into a new range where certain deductions no longer apply, so you could make that extra little bit of income, then lose out on deductions totaling more than your increased income.
It’s not as simple as the progressive tax brackets look at first glance.
That’s what the standard deduction is for unless you are talking about a very narrow range of only freelancers/business owners
There are other deductions that no longer come into play after a certain income. If I recall correctly, mortgage interest, child tax credits, and some medical deductions.
OK but owning a house and having children are both choices, so I’m not exactly sure I see what’s so unfair about not having those certain deductions. Medical is the only one I agree is legitimate here so fair point
Not sure what choice has to do with what I was saying. Of course those are choices, but my point was that there are certain inflection points with income where post-tax income can actually go down.
I just don’t equate not receiving tax deductions with being taxed more, especially when the deductions aren’t available to everyone (i.e. home ownership and kids). There is a fair bit of nuance here being glossed over IMO.