Your raise won’t shrink your paycheck (we promise)

Tax Strategies

💰 The bracket myth that’s talking people out of taking raises

Stop us if you’ve heard this one before: your coworker is turning down a raise because they “don’t want to get bumped into a higher tax bracket.” First of all, Brad, that’s not how any of this works, and second, it’s costing you real money.

How marginal brackets actually work

U.S. income tax is layered, like the worst cake known to man. Each chunk of income is taxed at its own rate:

A raise from $100,000 to $110,000 doesn’t tax your whole salary at a new rate — only the slice above $105,701 gets taxed at 24%. Everything below stays exactly where it was.

The mix-up? People confuse their marginal rate (the rate on their last dollar) with their effective rate (the blended average across everything). Nobody pays their marginal rate on their entire salary.

What you should actually do

👉 Check where your income falls on the 2026 bracket table

Personal Finance

🏖️ Why unlimited PTO isn’t the miracle you think it is

Unlimited PTO sounds like the kind of job perk Santa Claus would dream up — until, of course, you leave said job and cold, hard reality hits.

The no-limits time off policy has become increasingly popular, with companies like Netflix and Coinbase offering it to attract top talent. But is it really all it’s cracked up to be? Let’s break it down.

What HR doesn’t tell you during onboarding

Traditional PTO accrues — you earn hours per pay period, they build up in a bucket, and in roughly 20 states, that bucket is legally treated as earned wages your employer must pay out when you leave.

Unlimited PTO doesn’t accrue. There’s no bucket. No balance means nothing owed — even in states with mandatory payout laws, because those laws apply to accrued time specifically.

And just in case you’re curious, this isn’t an employer oversight: not having to pay out PTO is a big part of why companies like these policies.

If a payout does happen

Some companies pay out unused time anyway, as a courtesy or under a hybrid policy. When that happens:

What you should do

Before you sign an offer with “unlimited PTO” as a headline perk, ask what happens to unused time at separation. The answer tells you whether it’s generosity or good marketing.

👉 See which states require PTO payout at separation

Tax Strategies

❌ Quit, laid off, or fired? The tax paperwork nobody mentions

Whether you quit in a blaze of glory, got shown the door, or were “restructured” out of existence, one thing stays the same: HR gives you a box for your desk plants and absolutely nothing else. No checklist, no roadmap, just a firm handshake and radio silence.

So here’s the paperwork nobody hands you on your way out — because the IRS, unlike your former employer, will absolutely be in touch.

Your money

Your coverage

Your retirement account

One timing trap

A big severance landing at year-end, stacked on a full year’s salary, can push that year’s top slice of income into a higher bracket. It’s still marginal (like we discussed earlier), but it can throw off quarterly estimates if you have other income streams, too.

👉 Request unemployment tax withholding with Form W-4V

Wacky Tax Tales

⚖️ He stole $738,000, then tried to convince the Supreme Court it was basically a loan

Somewhere, a tax attorney is still shaking their head at how close this argument came to working.

What happened

Eugene James, a labor union official with apparently more confidence than judgment, embezzled over $738,000 from his union and its insurer across four years and reported exactly none of it on his taxes.

When prosecutors caught up with him, his lawyers didn’t argue he hadn’t taken the money — they argued the money was never really “income” in the first place, since an embezzler is legally obligated to return what he steals, kind of like an extremely aggressive, unauthorized loan. There was even prior Supreme Court precedent backing him up: Commissioner v. Wilcox (1946) had said exactly this.

The Court’s response, roughly translated

The Supreme Court looked at this argument, looked at the concept of “stealing $738,000 and calling it a loan,” and said, politely but firmly: no.

In James v. United States, the Court threw out its own prior ruling and held that:

James’s conviction got tossed anyway, on a technicality about relying on the old rule before it flipped — so justice, in the karmic sense, took its time. But the tax principle survived fully intact.

The far more boring version of this story

You will, hopefully, never embezzle $738,000. But the same rule quietly governs something almost everyone runs into: your employer accidentally overpaying you.

The moral? The IRS has never once asked, “But did you deserve this money?” It only asks whether you had it.

👉 Read the dirty details

The quick (and slightly prickly) stories we didn’t have time to get to:

If you made it this far, you’re our kind of nerd. Hit reply and tell us which story you want us to dive deeper into next week.