<prompt> Human: My boss told me on Friday I would be receiving a 5,000 Christmas bonus. Im trying to buy a house within the next few weeks and it would be great to have the extra money, but Im concerned that it would actually cost me more to accept the bonus in increased tax liability. Im a 3rd year law student who hasnt taken tax law so please correct me if any of my assumption here are incorrect. This is all new to me.I live in a state with no income tax. From Jan - April of this year I made 8,052.77 in hourly pay of which 1,125.04 was withheld for taxes. From May - Dec I made 28,000.00 in salary with no income tax withholdings. Federal Income Tax Brackets:9,226 to 37,450: 1537,451 to 90,750: 25 Without the bonus I had 36,052.77 in income which would puts me in the 15 bracket with a 5,407.92 tax liability. Which is what Ive been putting money aside for.The bonus puts my income at 41,052.77, in the 25 tax bracket, with a tax liability of 10,263.19.Ive paid 167 in interest on my car payment over the year and probably about 300 in textbooks but I dont believe I have any other deduction.However, I do have 95,000 in student debt of which about 9,000 is interest.Is it possible for me to make a 4,000 payment against the interest on my student debt to get my adjusted gross income back down into the 15 tax bracket?Thanks for the help!  <response>: You are only going to be taxed at 25 on the 41052-374513601So you are only paying 25 on about 3k. So your tax liability would increase from 5407 to 6307.25 