Strategy for filling out 15% bracket

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ParlayBogle
Posts: 37
Joined: Mon Jun 11, 2012 9:01 pm

Strategy for filling out 15% bracket

Post by ParlayBogle » Sat Dec 09, 2017 5:48 pm

According to my tax projections, I am going to be filing at the 15% marginal federal rate with around ~$1,000 to spare.

I'm considering either harvesting long term taxable gains in my after-tax brokerage to take advantage of the 0% LTCG rate, or doing a Roth conversion for same. One benefit of the Roth conversion seems to be that I can purposely convert "too much" and then re-characterize exactly the right amount to fill in the 15% to the last dollar.

I'm in Georgia where either action would result in a 6% tax. Anything else to consider?

Chip
Posts: 1761
Joined: Wed Feb 21, 2007 4:57 am

Re: Strategy for filling out 15% bracket

Post by Chip » Sun Dec 10, 2017 7:09 am

ParlayBogle wrote:
Sat Dec 09, 2017 5:48 pm
I'm in Georgia where either action would result in a 6% tax. Anything else to consider?
I think you've got the basics covered. The other thing to consider is if the extra income would affect any tax credits you might otherwise be eligible for. Also, ACA premiums/credits if you're buying health insurance through the exchange.

RustyShackleford
Posts: 1216
Joined: Thu Sep 13, 2007 12:32 pm
Location: NC

Re: Strategy for filling out 15% bracket

Post by RustyShackleford » Sun Dec 10, 2017 2:23 pm

I asked this same question a few years back and it generated much great discussion. I strongly recommend you reads it:

viewtopic.php?f=2&t=145381

I believe the gist was, you're probably better off using it for Roth conversion. That's the gift that keeps on giving, whereas LTCG harvesting or basis step-up is just a one-time advantage.

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