Offer Negotiations - Lessons learnt

Things to point out when negotiating an increase.

1. Confirm if the role location has state taxes. If so, calculate the difference between your current and the new roles compensation to ensure you are getting a reasonable increase.

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   Example. If your current base is $140k staying in Florida, If offered a TC of $160k in an income taxed state like Virginia, then there’s no difference in pay. Push for higher.

2. Avoid having a salary near the start of a tax bracket.

   There are seven federal income tax rates and brackets in 2023 and 2024: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your taxable income and filing status determine which federal tax rates apply to you, and how much in taxes you'll owe that year.

   Example. If offered a TC of $250k, you are at the base of a 35% tax bracket, which is a lot compared to your bracket-mates that go up to $578,125.

   Tax brackets 2023 for taxes filed in 2024

   | Tax Rate | Single | Married filing jointly | Married filing separately | Head of household | | --- | --- | --- | --- | --- | | 10% | $0 to $11,000. | $0 to $22,000. | $0 to $11,000. | $0 to $15,700. | | 12% | $11,001 to $44,725. | $22,001 to $89,450. | $11,001 to $44,725. | $15,701 to $59,850. | | 22% | $44,726 to $95,375. | $89,451 to $190,750. | $44,726 to $95,375. | $59,851 to $95,350. | | 24% | $95,376 to $182,100. | $190,751 to $364,200. | $95,376 to $182,100. | $95,351 to $182,100. | | 32% | $182,101 to $231,250. | $364,201 to $462,500. | $182,101 to $231,250. | $182,101 to $231,250. | | 35% | $231,251 to $578,125. | $462,501 to $693,750. | $231,251 to $346,875. | $231,251 to $578,100. | | 37% | $578,126 or more. | $693,751 or more. | $346,876 or more. | $578,101 or more. |

   Table Reference: https://www.irs.gov/filing/federal-income-tax-rates-and-brackets