SevenUp
Full time employment: Posting here.
- Joined
- Jul 3, 2014
- Messages
- 885
The actual marginal tax rate (not necessarily the tax bracket) incurred by the taxpayer always matters, does it not?But if the incremental Roth conversions are just using credits that would otherwise go wasted then what the marginal rate is doesn't matter because the OP isn't paying the tax, Uncle Sam is.
When "the incremental Roth conversions are just using credits that would otherwise go wasted" the marginal tax rate is 0%, as shown in the chart.
It isn't until the taxable income rises to where there is $4000 tax liability, thus using all the non-refundable CTC, that the marginal tax rate goes above 0%.
At that point it jumps to 25% because the ordinary income is in the 10% bracket but each extra dollar of ordinary income pushes another dollar of QD<CG into that income's 15% bracket.