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Tax Bracket Question
Old 11-14-2016, 11:40 AM   #1
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Tax Bracket Question

I am pretty sure I have got this correct. Just wanted a sanity check before I withdraw funds this year.

Married filing jointly

Adjusted gross income $93863
Standard deduction $12600
Exemptions $8000

Taxable Income $73263

I am planning to withdraw funds from my IRA or 401K (over 59.5) to increase my gross income to the above level of $93863.

I think this maximizes my income to the top of the 15% tax bracket ?

Thank you


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Old 11-14-2016, 11:47 AM   #2
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Personal Exemptions rise to $4050 each in 2016.
Standard Deduction shown (MFJ) applies if you were born after Jan 1, 1952 and not blind.

$75,300 of taxable income is the top of the 15% tax bracket in 2016 for MFJ returns.

If you have ordinary dividends or long-term capital gains then I would verify with a provisional tax return using 2016 tax software.

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Old 11-14-2016, 11:50 AM   #3
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close........for 2016 top of 15% bracket is 75300. Also exemption for 2 is
8100 so you have a little more upside room.

well, at least you have confirmation.......gauss is too fast!
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Old 11-14-2016, 12:18 PM   #4
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One thing to keep in mind is if your income includes qualified dividends and/or long term capital gains, then if you overshoot, any excess will be taxed at ~30%.. the extra income is taxed at 15% ordinary rates and the increase bumps some qualified dividends/LTCG into the 15% capital gains rate.

You can mitigate this by making a portion of your withdrawals a Roth conversion and then recharacterize any excess. I have done that for a couple years now... I do my return and then convert more or recharacterize if necessary so my taxable income is exactly equal to the top of the 15% tax bracket.
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Old 11-14-2016, 12:33 PM   #5
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Thanks to all for quick replies.
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