This concept plays a key role in tax planning, and understanding your marginal tax rate can guide more tax-efficient investment choices.

To calculate the marginal tax rate on the investment, you'll need to figure out the additional tax on the new income. In this example, $500 will be taxed at 15% and $500 at 25%.

The marginal utility of income is the change in human satisfaction resulting from an increase or decrease in an individual's income.

To calculate the marginal tax rate on the investment, you'll need to figure out the additional tax on the new income. In this example, $500 will be taxed at 15% and $500 at 25%.