I Sabotaged My Own Raise — And I'm Not Even Mad About It

Dear Franklin,

I got offered a promotion last month that would bump me from $52k to $67k. I turned it down. My coworker told me I'd end up paying so much more in taxes that I'd barely see the raise. I hate money stuff and didn't want to deal with it. Now I'm second-guessing myself but also... am I wrong? Can taxes really eat up that much? — Jennifer, 34

Jennifer, I'm going to be gentle here: yeah, that's on you. But not for the reason you think.

Here's the math. You'd go from $52k to $67k — that's a $15k raise. Federal tax brackets don't work the way your coworker thinks they do. You don't jump into some catastrophic tax bracket where the government takes it all. You only pay a higher rate on the *new* money, not on what you already earned.

Using a rough 2024 estimate for a single filer with no dependents: you'd pay maybe $2,500 to $3,000 more in federal taxes on that $15k. Add state taxes (varies wildly by where you live), Social Security, Medicare — you're probably looking at $3,500 to $4,500 total. That leaves you with roughly $10,500 to $11,500 more per year. That's an extra $875 to $960 per month.

Your coworker steered you wrong. Or maybe they did the math wrong. Either way, you walked away from almost $11,000 a year because you didn't want to "deal with it."

Here's what actually happens: You don't have to *do* anything different with your taxes. Your employer already knows how to withhold correctly. Your paycheck just goes up. You file taxes the same way you always do. There is no tax monster waiting for you.

The real cost? Over the next 10 years, you're leaving $110,000 on the table (not accounting for future raises built on this promotion). That's a car. That's a down payment. That's early retirement moved back two years.

I get that money stuff is frustrating. Most people find it boring or scary. But "I don't want to deal with it" is the most expensive sentence in personal finance. You literally paid $11k a year to avoid five minutes of understanding how tax brackets work.

Here's your one move: Call your boss this week. Say you've been thinking about it and you'd like to reconsider the promotion. If it's still available, take it. If you need to wait for the next opportunity, ask when that might be. Yes, it's awkward. It's less awkward than being $110,000 poorer in a decade.

Then spend 20 minutes on the IRS website or ask a friend who gets this stuff. You don't need to become a tax expert. You just need to know enough to not sabotage yourself.

—Franklin

DISCLAIMER: I'm a columnist, not a financial advisor or tax professional. For personalized tax strategy, consult a CPA or enrolled agent in your state.