Suppose you are offered a $5,000 raise at work.Your current income tax rate is 25%.Your marginal income tax rate is 28%.Your average tax rate is 20%.The additional income tax you owe to the federal government (assuming you stay in the same rate bracket) if you accept the job will be:

Question

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The additional taxable income from the $5,000 raise is $5,000. Based on the marginal tax rate of 28%, the additional federal income tax owed would be $1,400 (28% of $5,000).

Suppose You Are Offered a $5,000 Raise at Work