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For tax brackets, I like the bucket of ping pong balls analogy. After filling up each bucket you color a percentage of the balls green (done on the whiteboard

For tax brackets, I like the bucket of ping pong balls analogy. After filling up each bucket you color a percentage of the balls green (done on the whiteboard of course), which represents the government's cut. When a bucket gets full, balls overflow into the next bucket. And monthly paycheck deductions are based on 1/12'th of the green balls in each bucket. This then explains why when you get a bonus it is taxed at 22% as those balls go in the last bucket with room in it (or 24%..., whatever the highest marginal tax rate someone is in).

DavidPeiffer 5y ago
>For tax brackets, I like the bucket of ping pong balls analogy. After filling up each bucket you color a percentage of the balls green (done on the whiteboard of course), which represents the government's cut. When a bucket gets full, balls overflow into the next bucket. And monthly paycheck deductions are based on 1/12'th of the green balls in each bucket. Thank you, this looks like a really clear and concise way of explaining the topic! I've been looking for a better way to explain it, particularly the bonuses.