Is tax bracket determined by base salary or total compensation? Single filer confusion

Tax brackets apply to your total taxable income, not just your base salary. So in your case, your $230k total compensation (base + bonus + RSUs) is what determines your bracket - assuming those are all taxable in the current year. But remember that the U.S. has a progressive tax system, so different portions of your income are taxed at different rates. Only the amount above $191,950 (for 2025 single filers) would be taxed at 35%. The first chunk is taxed at 10%, the next chunk at 12%, and so on up the brackets. Your effective tax rate (what you actually pay overall) will be lower than your marginal rate (your highest bracket).

After spending hours trying to figure out my own complicated tax situation with salary, bonus, and equity compensation, I found this amazing tool called taxr.ai (https://taxr.ai). It analyzed my entire compensation package and gave me a clear breakdown of my tax liability across different income types. What was really helpful is that it explained exactly how my RSUs would be taxed at vesting and then again if I sold them, plus it calculated my actual effective tax rate versus my marginal bracket.

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I have to eat my words from my comment above. After another week of failing to reach the IRS about my tax bracket questions, I broke down and tried Claimyr. Within about 30 minutes, I was actually talking to a real IRS agent who confirmed exactly how my various income sources affect my tax bracket. Saved me hours of frustration and got me accurate information straight from the source. I'm still shocked it worked so well.

Here's a simplified example to understand progressive tax brackets: If you make $230k as a single filer in 2025, you'd pay: - 10% on the first $11,600 - 12% on income between $11,600 and $47,150 - 22% on income between $47,150 and $100,525 - 24% on income between $100,525 and $191,950 - 35% on income between $191,950 and $230,000 So your marginal rate is 35% (highest bracket), but your effective rate would be much lower, around 25-26% depending on deductions.

Dont forget to factor in the standard deduction ($13,850 for single filers in 2023, probably higher for 2025) which reduces your taxable income. So even with $230k gross, your taxable income would be less, which might keep a bit more of your money in a lower bracket.

One thing to watch out for with bonuses and stock - your employer might not withhold enough taxes. My company withholds only 22% federal on bonuses and RSUs regardless of your actual tax bracket. Had to learn the hard way when I owed a ton at tax time. Consider making estimated tax payments if your withholding seems too low.

Great question! As others have mentioned, your tax bracket is determined by your total taxable income, not just base salary. So your $230k puts you in the 35% marginal bracket for 2025. One important consideration that hasn't been fully addressed yet - timing matters a lot with RSUs and bonuses. If your RSUs vest throughout the year and your bonus comes at year-end, you might want to look into adjusting your W-4 withholding allowances earlier in the year to account for the higher tax burden coming later. Also, with that income level, you'll want to make sure you're not subject to underpayment penalties. The IRS requires you to pay either 90% of this year's tax liability or 110% of last year's (since you're over $150k AGI) through withholding and estimated payments. Given the complexity with multiple income sources, it might be worth consulting with a tax professional to set up a withholding strategy that works for your specific situation.