I entered $93.69 from 1099-int and refund went down $12. Seemed reasonable. Entered $1.06 from bank and refund went down $12 again! Something's fishy...

[jeffbroders]

Upon further research it looks like if I edit the first value to 94.50 or higher, the refund drops that additional $12.  Is there a tax law clause with a $95 threshold?

[SteamTrain · Accepted solution]

Not that..

The reason is that the tax tables cover $50 ranges  ($25 if taxable income is below 3,000),and the tax only increases if you move into the next $50 range.

So if your income changes anywhere within that particular $50 range you are already in...nothing happens.

What freaks some people out is that their taxable income may be within a $1 of the next $50 range.., and adding $1 of income increases their taxes another $12.  but of course, the next $49 added, nothing happens.

The jump isn't always $12, it starts at maybe $5 at the $3000 lower end of the tax tables...and is ~$12 at the $100,000 end of the table

[jeffbroders]

ok. Wouldn't the next $50 range start at $100, rather than 94.50?  

[SteamTrain]

Depends on where the initial  Taxable income started.  You have two successive $50 ranges

IF the taxable income was "near" the bottom of one $50 range (say at the $5 point), then adding the $94 only crossed one $50 boundary...and ended up at  just $1 below the next crossover....where your added $1 crossed into the next