How docs think taxes work vs. how they ACTUALLY work

In this video, Ben demystifies how taxes work for physicians, contrasting common misconceptions with the reality of the tax system.

Many physicians incorrectly believe that being in a high marginal tax bracket means every dollar they earn is taxed at that high rate. Ben uses clear examples to explain how the progressive tax system actually operates.

Key Highlights:

• The Progressive Tax System Explained: Ben illustrates that the U.S. tax system is progressive, meaning income is taxed at different rates as it increases. For instance, the first $11,600 is taxed at 10%, the next segment up to $47,150 is taxed at 12%, and so on.
• Effective vs. Marginal Tax Rates: The effective tax rate is the average rate at which income is taxed. Despite a high marginal rate, the effective tax rate is typically much lower. For an income of $250,000, the effective tax rate is about 23%, not 35%.
• Earning More: Ben assures physicians that earning more will not drastically increase their overall tax burden. The fear of higher tax brackets should not deter them from maximizing their income potential.