Last year we had a relatively low tax rate, so I got frisky and took an extra 70K out of an IRA. Figured to take adavantage of the situation. (The RMD goes up every year, remember?) That was enough to bump us up a notch or two. So this year we are in a higher bracket than I wanted.
Poop. Some years you can’t win for losing.
As BHM pointed out, the higher bracket was likely avoidable. When considering realizing more income, I run the two sets of numbers via this website, which admittedly has limitations as well like not taking IRMAA or NIIT into consideration, but gives me a quick heads up of what my taxes should look like. I track income on a spreadsheet all year long, and realize the extra income the last days of the year. Not late enough last year, when we got hit with a huge capital gains distribution from one of our mutual funds on 12/31, while I did our Roth Conversion on 12/30, but there was buffer in my calcs treating all dividends as ordinary income, so it didn’t wind up hurting us tax wise.
https://engaging-data.com/tax-brackets/
Whoever first linked this website to TMF, THANK YOU. It has become our go to tool.
IP