SevenUp
Full time employment: Posting here.
- Joined
- Jul 3, 2014
- Messages
- 882
That exercise I leave to others!
Lots of interesting Fed income tax data
- Thread starter Midpack
- Start date
BubbaChris
Recycles dryer sheets
I am late to this thread, but I want to thank the OP for posting a current version of something I picked up earlier on our financial journey. The percentage of actual Federal tax paid by where the earners are by percentile. 88% paid by the top 25% of earners.
We had a handful of really good DINK earning years in the late 1990’s and I remember TurboTax had a screen which told me where our AGI stood as a percentile using the prior year’s statistics. It took some of the emotional bite out of the taxes we paid. I remember AMT undoing some of our tactics, and having 401k contributions returned and recategorized as income because DW was considered ‘highly compensated’ within her organization. In hindsight it meant we were on the path to FI. Even without adjusting for inflation, we never returned to that level of earning. But the good habits added to what time/compounding would do for us.
Lately we’ve been playing in the other end of the earnings spectrum to get the insurance premium tax credits which facilitated ER for us. The value of this, especially the time freedom of ER, means we are limited in what levers we can pull to manage future RMDs.
I’m okay with that too If we have to pay IRMAA down the road, it just means we’re back into an upper-percentile again and we will likely be blessed with having more than enough to enjoy those years too.
Best regards,
Chris
We had a handful of really good DINK earning years in the late 1990’s and I remember TurboTax had a screen which told me where our AGI stood as a percentile using the prior year’s statistics. It took some of the emotional bite out of the taxes we paid. I remember AMT undoing some of our tactics, and having 401k contributions returned and recategorized as income because DW was considered ‘highly compensated’ within her organization. In hindsight it meant we were on the path to FI. Even without adjusting for inflation, we never returned to that level of earning. But the good habits added to what time/compounding would do for us.
Lately we’ve been playing in the other end of the earnings spectrum to get the insurance premium tax credits which facilitated ER for us. The value of this, especially the time freedom of ER, means we are limited in what levers we can pull to manage future RMDs.
I’m okay with that too If we have to pay IRMAA down the road, it just means we’re back into an upper-percentile again and we will likely be blessed with having more than enough to enjoy those years too.
Best regards,
Chris
