So, as DW and I near our much anticipated ER launch I have a question about capital gains/interest/dividends. I've always been a bit confused about how this will work when we no longer draw a paycheck.
While working we have moved money around within the taxable account once a year to maintain our asset allocation. In some years (this past year for sure), doing so triggered a tax event that made both our eyes bulge (we had a good 2017 year as far as salaries and bonuses were concerned).
Once we retire we will spend down only the taxable account each year until around age 66. Currently we are 51 and 48.
So the hypothetical scenario would be:
Income need $85,000. No other taxable income other than capitals gains and interest/dividends on investments. No part time jobs/no rentals, etc.
If the capital gains triggered by selling off stock funds within the taxable account were $30K and our interest/div were $15K for the year, how much tax would we owe?
In the end I assume we would want our taxable income to fall below the adjusted income threshold, I think its around $77K for couples filing jointly, to avoid paying any tax on capital gains. I'm wondering how the 2018 $24K standard deduction, child credit and so forth play into this. We have one daughter.
Sorry for rambling, I'm just interested in knowing how much money we would need to draw from taxable savings to have $85K to spend when the dust settles given the above hypothetical scenario.
Taxes have always confused us
Thanks all
While working we have moved money around within the taxable account once a year to maintain our asset allocation. In some years (this past year for sure), doing so triggered a tax event that made both our eyes bulge (we had a good 2017 year as far as salaries and bonuses were concerned).
Once we retire we will spend down only the taxable account each year until around age 66. Currently we are 51 and 48.
So the hypothetical scenario would be:
Income need $85,000. No other taxable income other than capitals gains and interest/dividends on investments. No part time jobs/no rentals, etc.
If the capital gains triggered by selling off stock funds within the taxable account were $30K and our interest/div were $15K for the year, how much tax would we owe?
In the end I assume we would want our taxable income to fall below the adjusted income threshold, I think its around $77K for couples filing jointly, to avoid paying any tax on capital gains. I'm wondering how the 2018 $24K standard deduction, child credit and so forth play into this. We have one daughter.
Sorry for rambling, I'm just interested in knowing how much money we would need to draw from taxable savings to have $85K to spend when the dust settles given the above hypothetical scenario.
Taxes have always confused us
Thanks all