overrated

I'm approach the 28% Single Filers tax bracket for my income this year. This is including my per diem. I want to stay under $91,150 to avoid jumping to the next bracket. Does per diem count towards this? Thanks

Otterbox

Not as long as it isn't above the allowed rate...

https://www.irs.gov/pub/irs-regs/perdiemfaq&a.prn.pdf

PerfInit

Are you maxing out your 401-K contribution?

WesternSkies

Also max out your HSA if you have one.

B317

Remember, only the amount over $91,150.00 AGI is taxed at the higher amount. If you should end up with a taxable income of lets say $93,150.00 only the additional $2000.00 would be taxed at the higher 28%. That comes to an additional $60.00 in tax. Is the $91,150.00 before or after your deductions?

EWRflyr

Per diem is non-taxable if it includes an overnight (at least paid that way at almost all companies that I'm aware of).

And most likely you are not even close to being "in" the 28% tax bracket.

1. Voluntary 401K Contributions? If they are standard contributions and not a Roth 401K contribution, then the contributions come out before federal income tax is applied.

2. Health care premiums also come out prior to federal income tax being applied

3. You have personal exemptions and standard or itemized deductions to arrive at your Adjusted Gross Income (you also could have interest income and dividends, etc.)

4. As was mentioned, our federal tax code is a progressive tax with income tiers. So your earnings this year have been subject to the various tiers. You mentioned being a Single Filer. The tax bracket break down is:

10% - $0-9,275
15% - $9,275-37,650
25% - $37,650-91,150
28% - $91,150-190,150
33% - $190,150-413,350
35% - $413,350-415,050
39.6% - $415,050+

If you earn up to $91,150, your tax would be $5,183.75, plus 25% of the amount over $37,650. For exactly $91,150 in AGI that equals $18,558.75 of tax. That results in an effective federal tax rate of 20.36%.

So your total taxable income for the year, gets reduced by health care premiums, 401K contributions, personal exemption and standard/itemized deduction. Your company's pay stub may show a Gross Income amount and a Taxable Income amount like my company does. The gross one is a lot more than the actual taxable income amount.

hockeypilot44

You need to research taxes a little bit more. I would say you don't understand how they work at all from reading your post.

crewdawg

The government hates us single peeps!

Also, what EWR said.