What tax bracket?

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Joejoe00
Posts: 46
Joined: Sun Jan 21, 2018 11:22 am

What tax bracket?

Post by Joejoe00 » Wed Jan 24, 2018 7:00 pm

How do i figure out what tax bracket i am in? I make 52,000 per year...contribute 5500 per year to traditional ira...should i convert my traditional to a roth? I have 75500 in my trditional ira.

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: What tax bracket?

Post by livesoft » Wed Jan 24, 2018 7:03 pm

Look at your tax return from 2016 or 2017 and see what is on line 43. Then compare that to IRS documentation found by searching.

So it is not what you make which might appear on line 7, but it is what is your taxable income. At $52K income, you could be in the 0% tax bracket because your taxable income could be zero.

I also see from other posts of yours that you have a tax person and there is some question about whether your tax returns were filled out properly.
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The Wizard
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Location: Reading, MA

Re: What tax bracket?

Post by The Wizard » Wed Jan 24, 2018 7:10 pm

Joejoe00 wrote:
Wed Jan 24, 2018 7:00 pm
How do i figure out what tax bracket i am in? I make 52,000 per year...contribute 5500 per year to traditional ira...should i convert my traditional to a roth? I have 75500 in my trditional ira.
You are saving 10% of gross income for retirement, unless you have a 401(k) in there as well.
That's good but not excellent.
I would stay with the tIRA unless there's more to tell us...
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Topic Author
Joejoe00
Posts: 46
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Re: What tax bracket?

Post by Joejoe00 » Wed Jan 24, 2018 7:15 pm

I do have a 401k but theres only 5,000 innit

livesoft
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Re: What tax bracket?

Post by livesoft » Wed Jan 24, 2018 7:16 pm

Your tax bracket will not depend on how much is in your 401(k) nor on how much is in your IRA nor on how much is in your wife's IRA.
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The Wizard
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Re: What tax bracket?

Post by The Wizard » Wed Jan 24, 2018 7:20 pm

Joejoe00 wrote:
Wed Jan 24, 2018 7:15 pm
I do have a 401k but theres only 5,000 innit
Ok, but it's almost never a good idea to do Roth conversions when you are still fully employed.
If you want something to focus on financially, then work on increasing your 401(k) contributions gradually over the next five years...
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Topic Author
Joejoe00
Posts: 46
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Re: What tax bracket?

Post by Joejoe00 » Wed Jan 24, 2018 7:21 pm

Thnks

livesoft
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Re: What tax bracket?

Post by livesoft » Wed Jan 24, 2018 7:44 pm

The Wizard wrote:
Wed Jan 24, 2018 7:20 pm
If you want something to focus on financially, then work on increasing your 401(k) contributions gradually over the next five years...
It may be wiser to increase the contribution to the spouse's IRA. This will depend on the company match to the 401(k) and the funds available in the 401(k). If no match, then the IRA contributions will be a better decision.
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NightFall
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Re: What tax bracket?

Post by NightFall » Thu Jan 25, 2018 8:34 am

You have received some very accurate information about how to calculate your tax bracket. You can, of course, estimate your tax bracket easily. I understand that you are married with one kid from your previous posts. Assuming $52K is the entire income from your household and we're estimating 2017 taxes...

$52000 (income)
- $12,700 (standard deduction for MFJ)
- $4050 x 3 = $12,150 (personal exemptions for 3)
-$5500 (IRA contribution)
-----------------------
$21,650 taxable income (assuming no dividends, other sources of income, other deductions,....)

The 15% bracket starts at $18,650. So a simple guess would put you in the 15% marginal income bracket. If you're tax situation is simple enough, you may be able to download one of the federal free editions of current tax software to get an even more accurate estimate.

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FiveK
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Re: What tax bracket?

Post by FiveK » Thu Jan 25, 2018 2:57 pm

Joejoe00 wrote:
Wed Jan 24, 2018 7:00 pm
How do i figure out what tax bracket i am in? I make 52,000 per year...contribute 5500 per year to traditional ira...should i convert my traditional to a roth? I have 75500 in my trditional ira.
For the Traditional versus Roth question, it is not bracket that matters but marginal tax rate.

Your marginal rate is affected by, and may be the same as, your bracket, but it also depends on whether you are eligible for credits, subject to phaseouts, etc.

You can get a value for your marginal rate in TurboTax or similar by changing something (e.g., deductible IRA contribution, tIRA withdrawal, etc.) by $100 and calculating the change in tax due (or amount refunded).

For a broader picture, see a tool such as the personal finance toolbox spreadsheet that will show marginal rates in graphical form.

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brother7
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Re: What tax bracket?

Post by brother7 » Thu Jan 25, 2018 3:01 pm

OP, are you married or single?
Some of the responses indicate you may be married but a review of your posts doesn't shed any light on your status.

Topic Author
Joejoe00
Posts: 46
Joined: Sun Jan 21, 2018 11:22 am

Re: What tax bracket?

Post by Joejoe00 » Thu Jan 25, 2018 3:54 pm

Married...shes a stay at home mom

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