My tax bracket is 11%, for $35,000. Any additional income such as $500 is taxed by 22%.

[Texas Roger · Accepted solution]

There is no 11% tax bracket. The brackets are 10%, 12%, 22% and so forth. When your taxable income reaches the top of the 12% bracket, any income above that amount is taxed at 22%.

Here are the brackets for certain income amounts based on your filing status:

2018 Taxable Income Brackets and Rates

2018 Marginal Tax Rate      Single and MFS Filers       Married Joint Filers           Head of Household Filers

10%                                     $0–$9,525                          $0–$19,050                         $0–$13,600

12%                                     $9,526–$38,700                 $19,051–$77,400                $13,601–$51,800

22%                                     $38,701–$82,500                $77,401–$165,000              $51,801–$82,500

24%                                    $82,501–$157,500                $165,001–$315,000           $82,501–$157,500

32%                                   $157,501–$200,000               $315,001–$400,000           $157,501–$200,000

35%                                    $200,001–$500,000 (S)         $400,001–$600,000           $200,001–$500,000

                                          $200,001–$300,000 (MFS)

37%                                   Over $500,000 (S)                   Over $600,000                   Over $500,000

                                           Over $300,000 (MFS)

[chavko2]

It doesn’t answer my point why additional $500 is taxed by 22%. My taxable income income is $35000 and it is far away from the top of 12% bracket that is $77400. 

Your software is malfunctioning. 

[Texas Roger]

According to the 2018 Tax Tables, the tax on $35,000 of taxable income for married filing jointly is $3822. Is that the amount of tax TurboTax calculated?

[SweetieJean]

Keep in mind that any increase in income can lower some deductions and credits (such as EIC), and make more of your Social Security income taxable.  If that extra income is from self-employment, you pay approx. 15% SE tax in addition to regular taxes.

[chavko2]

Additional income was from W-4. There is no EIC.

[SweetieJean]

Do you mean W-2?  W-4 is a withholding form that you give your employer.

[chavko2]

W-2

[SweetieJean]

Are you itemizing?  Your medical deductions might have gone down because of the higher income (7.5% of AGI floor).

[chavko2]

standart deductions

[Zbucklyo]

How about social security income?  Really, we can sit here and guess all day, but the only way to really understand what is going on is to compare the tax return before and after the addition of income and see what is changing.