Most modern tax systems are progressive: different income slices are taxed at different rates. Being 'in' the 22% bracket doesn't mean paying 22% on all your income โ only on the portion above the previous bracket's threshold.
Understanding your marginal rate helps size decisions like traditional vs Roth contributions, whether to take a bonus this year or next, and how much a deduction is worth.
Project this decision against your real numbers with a private, calm dashboard.
Open Financial OS โFrequently asked questions
Marginal vs effective rate?
Marginal is the rate on your next dollar. Effective is total tax divided by total income โ always lower than the marginal rate in a progressive system.