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More than half of Americans earning more than $100,000 a year say they're living paycheck to paycheck, according to a report from PYMNTS and LendingClub. This may be a result of a sneaky behavioral phenomenon called lifestyle creep, which is when a person's spending habits expand as their income rises. The rise in the cost of living complicates matters, as incomes have not kept up with inflation. Watch the video above to learn more about why Americans struggle to keep money in their pockets.
There is one instance in the US where you can lose money from a raise. You can deduct 100% of student loan interest as an “above the line” deduction (not an itemized deduction) unless you make more than $72,000 a year, and then you can deduct none of it.
Some people pay thousands of dollars in student loan interest a year. A $1 per year raise could put them over the line and cost them whatever the marginal tax rate is on those thousands of dollars.
It’s a stupid cliff of a line. It should be a curve.
There is one instance in the US where you can lose money from a raise. You can deduct 100% of student loan interest as an “above the line” deduction (not an itemized deduction) unless you make more than $72,000 a year, and then you can deduct none of it.
Some people pay thousands of dollars in student loan interest a year. A $1 per year raise could put them over the line and cost them whatever the marginal tax rate is on those thousands of dollars.
It’s a stupid cliff of a line. It should be a curve.