I saw on the new IRS tax brackets that a cut off is 1392. My bi-weekly income is about 1455 (counting overtime).but after the pre-tax stuff such as health care and 401k, my taxable income shows as about 1377. So if 1392 serves as the cut off between 15% and 25%, where would I fall in?
Tax brackets are based upon your taxable income, which is gross income minus exemptions and deductions. That means you would subtract 401k contributions, unreimbursed business expenses, mortgage interest, personal exemptions, etc. from your gross income prior to determining your tax bracket.
Your actual tax bracket when you file your return is based on your taxable income. Your bracket for withholding is based on a combination of your gross income (minus any pretax deductions) for the pay period and what you put on your W-4 - that combination gives an estimate of what your eventual bracket will be, if you filled out your W-4 accurately. If your overtime is spread reasonably evenly over the year, the deductions will probably be correct or close. But if some pay periods you have a huge number of overtime hours, and others have little or none, they might take out too much - then you'd get the extra refunded when you file.
You will most likely fall in the 15% tax bracket. Tax brackets are based on taxable income, so if you have other deductions, you will be provided with a little more breathing room.
Your bracket is based on your gross pay minus 401(k) contributions. If your income goes into the next bracket, only the amount over the break is taxed at the higher rate. If your taxable income is $1,377, part will be taxed at 10% and part at 15%. If you go over $1,392, only the income over $1,392 will be taxed at 25%.
