Usually (and no obvious reason to think otherwise for you) keeping your marginal tax rate more or less constant over the years will work out best.What should my ideal tax rate should be in my situation?
The way Taxation of Social Security benefits works, you might never fall below a 22% marginal tax rate after either of you starts taking SS.
Speaking of starting SS, take a look at Open Social Security: Free, Open-Source Social Security Calculator. Unless you have shorter than average life expectancies, treating the suggest start ages from that tool as "no earlier than" may make sense for you, given the higher marginal rates you might pay on Roth conversions when SS is in the mix.
You might find Roth Conversion and Capital Gains On ACA Health Insurance useful, along with the chart in this post.
Assuming you'll have $40K in QD+LTCG this year, you might consider either
- $83K in ordinary income, keeping you just under the 27% marginal rate zone, or
- $210K in ordinary income, "diluting" the 27% cost with a bunch of 22% rate, for a 23.5% marginal rate on the $127K between $83K and $210K.
Does any of that make sense? ...raise more questions?
Statistics: Posted by FiveK — Sat Nov 09, 2024 12:15 am — Replies 3 — Views 493