IRS Tax Brackets for 2024 Tax Year

Here are the brackets from the Internal Revenue Service for the tax year stated above. This means these are the rates applied for money earned in this given year. Paying taxes is a critical part of building wealth whether we like them or not. A great number of people have lost a fortune trying to avoid taxes, or worse, going to prison.

As you start your passive income journey, the additional money you make per year (say $1,000 - $5,000 USD) may not substantially change your overall tax liability from a gross income standpoint if you're working a full-time job. At some point, if the passive income is not a replacement, but in addition to your W-2 income, you may get bumped into a higher tax bracket. That means the portion that is over the previous bracket will get taxed at the higher rate.