topic MARGINAL tax rate was 24.7% on $10,000 extra interest income, why not marginal rate of 24% in Retirement tax questions

MARGINAL tax rate was 24.7% on $10,000 extra interest income, why not marginal rate of 24%

DCW54 — Wed, 18 Feb 2026 13:33:22 GMT

2025 TurboTax desktop I added $10,000 of interest income and the Marginal tax rate was 24.7%

Why was the Marginal rate not 24%?

Re: MARGINAL tax rate was 24.7% on $10,000 extra interest income, why not marginal rate of 24%

DavidD66 — Wed, 18 Feb 2026 14:01:15 GMT

It is impossible to say for sure with such limited information; however, it is probably because the additional interest income caused some additional taxes to kick in, like the Net Investment Income Tax NIIT), or it may have partially reduced a credit.

Re: MARGINAL tax rate was 24.7% on $10,000 extra interest income, why not marginal rate of 24%

dmertz — Wed, 18 Feb 2026 14:37:31 GMT

The increase in AGI caused by the extra interest income can have all sorts of side effects. Compare Forms 1040 with and without this extra income to find any side effect.

It's also possible that a small portion of the additional income actually fell into the 32% tax bracket.

Re: MARGINAL tax rate was 24.7% on $10,000 extra interest income, why not marginal rate of 24%

DCW54 — Sat, 21 Feb 2026 17:46:43 GMT

Thanks for the tip on comparing the 1040's. I'll look into that.

I'm well below the 32% bracket; just breaking into the 24%. Take standard deduction.

The added $10,000 interest was just testing a what if scenario. My expectation was a straight 24% tax.

D'OH! A Homer Simpson moment.

Typing this out it dawned on me that I lose part of the Additional Senior Deduction.

That explains change in the marginal rate.

Thanks for the memory jogger.

SOLVED.