There has been a lot of misinformation on credible news sources regarding ways to "avoid moving into the next tax bracket". I've seen things about putting your money in a 401k, and IRA, an insurance fund. These aren't bad ideas, but they won't help you pay less taxes on the rest of your taxable income. If you live in the US, please educate yourself on the marginal tax system before listening to any of these articles.
So my co-worker, snidely grinning, explained how much smarter than me he was by turning down his yearly bonus because it would have put him from a 22% tax bracket into a 24%. He even showed me the article he read that explained the tactic that only geniuses like him know about. I seriously thought he was joking at first and eventually had to say the fateful words that started the 2 hour debate: "you know that's not how it works, right?"
We ended up calling his uncle, who owned 4 buy-and-hold rental properties. His aunt eventually got involved over speakerphone - They both backed him up completely and even praised him for his genius. I went on to get a CPA friend of mine on the phone and he laughed out loud for a good 30 seconds.
This is the saddest part: We both Googled the matter and he was able to find almost as many articles that backed up his argument as I was able to find articles that explained reality.
Toward the end of the 2 hour argument, he absolutely didn't agree with me, but I could tell he realized he'd messed up. He ended it with "lets just chalk it up to semantics...". The next morning he stopped me in the hall and thanked me for the lively debate the evening before, to which I replied "Hey I love debating, I learn something new every time I debate" (just to make him feel better), and he replied with "Well I didn't learn anything, but yeah... that was fun...". SMH
Submitted February 01, 2019 at 09:09AM by MockStarket http://bit.ly/2HKNVht
