Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Agree that marginal rate applies to a small change in taxable income, but big enough to avoid issues like tax table increments. That doesn't mean that the same marginal rate doesn't apply to a larger increment of taxable income.
Last dollar or next dollar is fine conceptually, but practically it may not be useful for reasons we all seem to understand.
If the last dollar (or $50 or $100) of a traditional IRA or 401k contribution knocks you into the next lower tax bracket, or has some other effect on deduction, credit, or subisidy phaseins or phase outs, then there is more than one marginal tax rate involved in the decision. The marginal rate on the last $100 of change in taxable income might not be the main marginal rate that drives the decision, even though you might tell someone that that is your current marginal tax rate, and it is the rate that might determine your next decision.
I would not call the average of more than one marginal tax rate involved in a decision the marginal tax rate. I would call it what it isthe average of the marginal tax rates on that particular increment of income.
Kevin
Last dollar or next dollar is fine conceptually, but practically it may not be useful for reasons we all seem to understand.
If the last dollar (or $50 or $100) of a traditional IRA or 401k contribution knocks you into the next lower tax bracket, or has some other effect on deduction, credit, or subisidy phaseins or phase outs, then there is more than one marginal tax rate involved in the decision. The marginal rate on the last $100 of change in taxable income might not be the main marginal rate that drives the decision, even though you might tell someone that that is your current marginal tax rate, and it is the rate that might determine your next decision.
I would not call the average of more than one marginal tax rate involved in a decision the marginal tax rate. I would call it what it isthe average of the marginal tax rates on that particular increment of income.
Kevin
....... Suggested format for Asking Portfolio Questions (edit original post)
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
FiveK is definitely right that under certain conditions you need to use averages (mathematically; whether this is best called an "average" or just another "marginal" is what's at issue) instead of just the "true" marginal rate. Take a look at the example in Irregular Marginal Rates on my draft wiki page. The marginal rate starts off low, goes way up, then goes down again, and then there's a $200 "spike" or "cliff" due to the Saver's credit. I wrote the algorithm on that page that finds the optimum solution (I'm sure I didn't invent the algorithm, although I'm probably the first to spell it out in detail on the wiki.) To get to the optimal solution, for example with the spike, the $200 Saver's credit has to be averaged over the contribution necessary to get it. Same situation with my banana example. If you get a $5 rebate when you buy 100 bananas, the marginal rate on buying the 100th banana is actually very negative. The right answer is to look at the average price per banana for 100 bananas, and that will tell you whether you can make money selling them or not.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
It was actually a 300level Econ class but I don't think that matters.FiveK wrote: ↑Wed May 29, 2019 9:49 amSure. It's actually not my definition: LadyGeek brought the Kitces article into the discussion in this post.fyre4ce wrote: ↑Tue May 28, 2019 8:25 pmFiveK,
The biggest reason I have to support the "small" definition of marginal is that I think that's consistent with how it's used by other sources, in industry and academia. Can you tell me, for you, is it more that you think your "any size" definition is actually more consistent with other sources? Or, is it more that you think your definition is more useful, and consistency with other sources is less of a concern? I ask because it might tell us how we could possibly make some progress toward agreement.
Yes, that definition is more useful than a "single dollar" or first derivative one, in the context of the tax code. People can quote Economics 101 textbooks all they want, but unless those quotes include evaluation of nonmonotonic functions they aren't generally applicable to what we are discussing here.
As you have observed just yesterday in Understanding the Wiki  Traditional versus Roth  Bogleheads.org, people still don't understand why "marginal vs. effective" is not correct. Helping people understand that is the lens through which I look at this discussion on marginal rate. If we can provide that help, great!
I think this line of thinking is misguided. Our responsibility as wiki editors is to explain concepts using generally accepted language. Even if the generally accepted language is cumbersome, it's better to use it to explain the methods we want people to know so we remain consistent with the rest of the world, than to deviate and risk confusing people. In this case, I think an "average" rate is the correct term, because it literally IS a weighted average of the underlying marginal rates within that range.
Also, this is a general comment, not directed at FiveK. There's been some discussion of first vs second derivatives. To make sure we're on the same page: the "true" marginal tax rate is the slope of total tax liability vs. income, and this is the "first derivative". If total tax liability goes up $0.22 for $1 in extra income, $0.44 for $2, $0.66 for $3, etc, then the first derivative (marginal tax rate) is 22%. The second derivative would be the rate of change of the first derivative vs. income. In this example, the second derivative is zero over this range, because the marginal rate does not change; it's always 22%. At the boundary between the 22% and 24% brackets, the second derivative would have a value of 2%/$ for the one dollar that crosses the threshold, then go back go 0 until the next bracket boundary, etc. The units for a second derivative are %/$. Generally, the tax code is written so that there are bands (brackets and phaseouts) of constant marginal rate, and sharp jumps in marginal rate at the boundaries. So, the second derivative will be zero over most of the income range, and will have spikes at the boundaries. One exception I'm aware of is the phaseout of the Section 199A deduction, where each dollar of additional income adds to the deduction, but also causes the whole deduction to get phased out. I haven't run the math but when I plotted it for me, it definitely had a nonzero slope. I would guess it was something like 1% per $10,000. In any case, I don't see how the second derivative is useful for this analysis.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
See https://www.bogleheads.org/wiki/User:Fy ... inal_rates for one fully worked example.
https://www.bogleheads.org/wiki/Taxatio ... y_benefits has some similar charts.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
199A phase out is linear, 1% to $5k for MFJ. As in it is the full 20% deduction at $315k for 2018 and 0% @ $415k. So the deduction itself is linear. 10% deduction at $365k.
If deduction is based off of taxable income for MFJ (it is lesser of taxable income or QBI) it gets interesting. If all else is equal, the marginal tax rate is not liner . Because the underlying tax bracket itself changes from 32% to 34% at $400k. So, the marginal tax rate (even if all else is equal) is not linear throughout the range.
It’s been about 25 years since I’ve looked at differential equations. But I remember, first order derivative of position is speed, second order derivative of position is acceleration and third order derivative of position is jerk. However, jerk is second order derivative of velocity. I think this is more intuitive.
Anyhow...I think I can see how underlying tax and credit etc changes doesn’t necessarily mean second order derivative. Is that what you mean OP?
Then just forget about derivatives for R vs T, just show examples.
Once you spell out the constraints (no different than field algebra of a field of whole numbers from 5 to +5, where 3+3 is not 6 anymore) of sticking to existing definitions, an absolute solution that the world would understand is impossible.
Just spell out the different definitions with examples when it comes to R vs T. For just a basic Marginal tax rate definition, the current definition is not wrong enough to demand a change.
If deduction is based off of taxable income for MFJ (it is lesser of taxable income or QBI) it gets interesting. If all else is equal, the marginal tax rate is not liner . Because the underlying tax bracket itself changes from 32% to 34% at $400k. So, the marginal tax rate (even if all else is equal) is not linear throughout the range.
It’s been about 25 years since I’ve looked at differential equations. But I remember, first order derivative of position is speed, second order derivative of position is acceleration and third order derivative of position is jerk. However, jerk is second order derivative of velocity. I think this is more intuitive.
Anyhow...I think I can see how underlying tax and credit etc changes doesn’t necessarily mean second order derivative. Is that what you mean OP?
Then just forget about derivatives for R vs T, just show examples.
Once you spell out the constraints (no different than field algebra of a field of whole numbers from 5 to +5, where 3+3 is not 6 anymore) of sticking to existing definitions, an absolute solution that the world would understand is impossible.
Just spell out the different definitions with examples when it comes to R vs T. For just a basic Marginal tax rate definition, the current definition is not wrong enough to demand a change.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
This is a bit offtopic, but you can get nonzero second derivative from Section 199A. Take a look at this analysis I did earlier this year for the marginal tax rate for business income:gilgamesh wrote: ↑Wed May 29, 2019 7:23 pm199A phase out is linear, 1% to $5k for MFJ. As in it is the full 20% deduction at $315k for 2018 and 0% @ $415k. So the deduction itself is linear. 10% deduction at $365k.
If deduction is based off of taxable income for MFJ (it is lesser of taxable income or QBI) it gets interesting. If all else is equal, the marginal tax rate is not liner . Because the underlying tax bracket itself changes from 32% to 34% at $400k. So, the marginal tax rate (even if all else is equal) is not linear throughout the range.
It’s been about 25 years since I’ve looked at differential equations. But I remember, first order derivative of position is speed, second order derivative of position is acceleration and third order derivative of position is jerk. However, jerk is second order derivative of velocity. I think this is more intuitive.
Anyhow...I think I can see how underlying tax and credit etc changes doesn’t necessarily mean second order derivative. Is that what you mean OP?
Then just forget about derivatives for R vs T, just show examples.
Once you spell out the constraints (no different than field algebra of a field of whole numbers from 5 to +5, where 3+3 is not 6 anymore) of sticking to existing definitions, an absolute solution that the world would understand is impossible.
Just spell out the different definitions with examples when it comes to R vs T. For just a basic Marginal tax rate definition, the current definition is not wrong enough to demand a change.
https://drive.google.com/file/d/1SyQsCg ... sp=sharing
It's true that the phaseout (from $315k to $415k for MFJ) is linear, but when you compute the tax due you get higherorder term in the tax equation. The 199A deduction term is basically [business income] * (415000  [business income])/100000 * 20% * [tax bracket rate]. When you multiply that through, you get a [business income]^2 term, and when you take the derivative of tax due as a function of income to get the marginal tax rate, you still have a [business income] term left over. So, the tax rate with respect to business income increases linearly throughout the phaseout range. When you take the derivative a second time, you get:
partial^2 of Tax / (partial of business income)^2 = [tax bracket rate] * 2 * 20% / $100,000
For the 24% tax bracket, this is a second derivative of 24% * 2 * 20% / $100,000 = 9.6 * 10^7 /$. That's equal to 1% per $10,416.67  hey, pretty close to my earlier estimate
Maybe if/when there's a Section 199A article up on the wiki I'll add some of this to it in formal way.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
It’s been a while since I’ve discussed matters on this fashion, so I’m rusty...but isn’t a nonzero second order derivative from 199A possible just from the fact the underlying tax bracket changes within the phaseout?
P.S: It’s been too long for me to check on the exact computation, I can only hold on to concepts now.
P.S: It’s been too long for me to check on the exact computation, I can only hold on to concepts now.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Let's say we have a math function Tax_due which takes an input of income. So, Tax_due(income) = whatever tax is due for that level of income. Let's say there's a 24% flat tax, so:gilgamesh wrote: ↑Wed May 29, 2019 8:32 pmIt’s been a while since I’ve discussed matters on this fashion, so I’m rusty...but isn’t a nonzero second order derivative from 199A possible just from the fact the underlying tax bracket changes within the phaseout?
P.S: It’s been too long for me to check on the exact computation, I can only hold on to concepts now.
Tax_due(income) = 24% * income
Tax_due($100,000) = $24,000.
The derivative (or, "slope") of Tax_due with respect to income is the marginal tax rate. In this case it's a simple answer, the derivative is just 24%.
The second derivative is how much the marginal rate changes with income. For a flat tax, the second derivative is 0  the marginal rate never changes.
If the tax structure has brackets, the second derivative is zero within the brackets, and has a spike just at the boundary where it steps up. Second derivative = (change in marginal rate)/(change in income). So at the $1 where the rate steps up from 24% to 32%, the second derivative is 8%/$, then goes back to zero.
Section 199A deduction is unusual in that the second derivative is nonzero over a wide range. Look at the area I circled on the plot. The marginal tax rate ramps up over the phaseout range. There are ALSO spikes due to changes in bracket over that range, but even without those, the second derivative would be nonzero.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Of course I see the the area you circled, but other than the underlying change in tax brackets @ 400k, can you tell me why the second order derivative is nonzero.
If there’s just the linear change in 199A deduction over the phaseout range, y would there be a nonzero second derivative if not for the underlying change in tax brackets. What are the underlying factors that’s contributing to the graph you linked?
Graph is not enough, can you explain the concept behind y ur graph is showing nonzero second derivative for three different reasons? What r they in spoken language?
I’m asking because I have a feeling your graph is not representative of just the 199A deduction but other confounding parameters. If you can spell out the reasons for second order non zero, then I can be certain you are only considering 199A deduction.
If there’s just the linear change in 199A deduction over the phaseout range, y would there be a nonzero second derivative if not for the underlying change in tax brackets. What are the underlying factors that’s contributing to the graph you linked?
Graph is not enough, can you explain the concept behind y ur graph is showing nonzero second derivative for three different reasons? What r they in spoken language?
I’m asking because I have a feeling your graph is not representative of just the 199A deduction but other confounding parameters. If you can spell out the reasons for second order non zero, then I can be certain you are only considering 199A deduction.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
See below for a similar chart that one can generate using the personal finance toolbox spreadsheet. I haven't investigated the specific reasons for the sloped sections of the marginal curve (where the second derivative is nonzero), but all the formulas in that spreadsheet are visible if one wants to do such an investigation.gilgamesh wrote: ↑Wed May 29, 2019 10:24 pmOf course I see the the area you circled, but other than the underlying change in tax brackets @ 400k, can you tell me why the second order derivative is nonzero.
If there’s just the linear change in 199A deduction over the phaseout range, y would there be a nonzero second derivative if not for the underlying change in tax brackets. What are the underlying factors that’s contributing to the graph you linked?
Graph is not enough, can you explain the concept behind y ur graph is showing nonzero second derivative for three different reasons? What r they in spoken language?
I’m asking because I have a feeling your graph is not representative of just the 199A deduction but other confounding parameters. If you can spell out the reasons for second order non zero, then I can be certain you are only considering 199A deduction.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
You asked for itgilgamesh wrote: ↑Wed May 29, 2019 10:24 pmOf course I see the the area you circled, but other than the underlying change in tax brackets @ 400k, can you tell me why the second order derivative is nonzero.
If there’s just the linear change in 199A deduction over the phaseout range, y would there be a nonzero second derivative if not for the underlying change in tax brackets. What are the underlying factors that’s contributing to the graph you linked?
Graph is not enough, can you explain the concept behind y ur graph is showing nonzero second derivative for three different reasons? What r they in spoken language?
I’m asking because I have a feeling your graph is not representative of just the 199A deduction but other confounding parameters. If you can spell out the reasons for second order non zero, then I can be certain you are only considering 199A deduction.
Take a look at the talk page on my draft Marginal Tax Rates page: https://www.bogleheads.org/wiki/User_ta ... l_tax_rate
I put the derivation of the marginal tax rate formulas and it should be clear why they are variable. It's all math and in the way the 199A deduction is calculated. I did the math with a mix of QBI and nonQBI income, but an allQBI case could be run just by setting N=0.
Here's a spreadsheet that verifies those numbers:
https://drive.google.com/file/d/1qUOIpx ... sp=sharing
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I don't intend to click on the ~30K links (or the 39.6K links for "marginal tax rate" "additional dollar"), but feel free.gilgamesh wrote: ↑Wed May 29, 2019 11:35 amP.S: I didn’t try google hits, as I wouldn’t put much weight on the results. I prefer to click on the results and see.
I don't know of any other easy way to check to see the relative use of the different definitions.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I have to say this now...you are hiding behind numbersfyre4ce wrote: ↑Thu May 30, 2019 1:00 amYou asked for itgilgamesh wrote: ↑Wed May 29, 2019 10:24 pmOf course I see the the area you circled, but other than the underlying change in tax brackets @ 400k, can you tell me why the second order derivative is nonzero.
If there’s just the linear change in 199A deduction over the phaseout range, y would there be a nonzero second derivative if not for the underlying change in tax brackets. What are the underlying factors that’s contributing to the graph you linked?
Graph is not enough, can you explain the concept behind y ur graph is showing nonzero second derivative for three different reasons? What r they in spoken language?
I’m asking because I have a feeling your graph is not representative of just the 199A deduction but other confounding parameters. If you can spell out the reasons for second order non zero, then I can be certain you are only considering 199A deduction.
Take a look at the talk page on my draft Marginal Tax Rates page: https://www.bogleheads.org/wiki/User_ta ... l_tax_rate
I put the derivation of the marginal tax rate formulas and it should be clear why they are variable. It's all math and in the way the 199A deduction is calculated. I did the math with a mix of QBI and nonQBI income, but an allQBI case could be run just by setting N=0.
Here's a spreadsheet that verifies those numbers:
https://drive.google.com/file/d/1qUOIpx ... sp=sharing
I’ve been on healthcare field for 25 years, and thus have been away from numbers for too long.
When I left, I was contemplating how I could make sense of time derivative of charge being current with relativity ...the World Wide Web was barely coming to existence then...I think the primitive search engine was called beaver, until then it was all dos commands ...my major was biology lol (In the 25 years I’ve never looked back, except I did look up on Fermat’s last theorem and saw it was solved) . Those days are long gone...I’m @ a high school level now...barely.
I spelled out how the change in tax bracket @400k makes the second derivative nonzero...Unless you spell it out like that, it’s not going to make much sense for me. Not that it need to....however it’s obvious our tax code is complex enough that some will face other factors. However no one can escape tax brackets. When it comes to 199A deduction, can you tell me any other factor other than change in tax brackets at $400k for MFJ that will render the second order derivative nonzero for every single person filing taxes as MFJ and utilizing the 199A deduction  spoken language please.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I have, in my mind, gone back and forth with you on this matter, and thus find no reason to say anything else than  “fair enough!”rkhusky wrote: ↑Thu May 30, 2019 2:19 pmI don't intend to click on the ~30K links (or the 39.6K links for "marginal tax rate" "additional dollar"), but feel free.gilgamesh wrote: ↑Wed May 29, 2019 11:35 amP.S: I didn’t try google hits, as I wouldn’t put much weight on the results. I prefer to click on the results and see.
I don't know of any other easy way to check to see the relative use of the different definitions.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Not trying to hide behind numbers As you might guess I work in a field where I use math, including calculus, on a regular basis  regular enough to keep up my skills, I guess.gilgamesh wrote: ↑Thu May 30, 2019 4:31 pm
I have to say this now...you are hiding behind numbers
I’ve been on healthcare field for 25 years, and thus have been away from numbers for too long.
When I left, I was contemplating how I could make sense of time derivative of charge being current with relativity ...the World Wide Web was barely coming to existence then...I think the primitive search engine was called beaver, until then it was all dos commands ...my major was biology lol (In the 25 years I’ve never looked back, except I did look up on Fermat’s last theorem and saw it was solved) . Those days are long gone...I’m @ a high school level now...barely.
I spelled out how the change in tax bracket @400k makes the second derivative nonzero...Unless you spell it out like that, it’s not going to make much sense for me. Not that it need to....however it’s obvious our tax code is complex enough that some will face other factors. However no one can escape tax brackets. When it comes to 199A deduction, can you tell me any other factor other than change in tax brackets at $400k for MFJ that will render the second order derivative nonzero for every single person filing taxes as MFJ and utilizing the 199A deduction  spoken language please.
I'll try to explain it as best as I can. The 199A deduction means that a percentage of income (up to 20% if it's all QBI) gets subtracted from taxable income. When you're in the phaseout and your income increases, two things happen simultaneously. The first is that the percentage of this deduction you're entitled to shrinks linearly, from 20% at $315k to 0% at $415k. The second is that the deduction itself gets bigger, due to more QBI. So, you're losing an increasing percentage of a growing number  that's a secondorder effect. If it were an increasing percentage of a constant number, the second derivative would be zero. But when you take the second derivative of a Q^2 term, you don't get zero, you get a nonzero constant. I know the calculus may be intimidating, but just focus on the formula for taxes due in the phaseout, toward the top of the page. Look at the deduction term: 20% * Q * [stuff in parenthesis with a Q in it] * TB. The parentheses have a Q inside, so there's a Q^2 term in there. This means that the tax due is, in part, a function of QBI^2. In other words, the tax rate ramps up with income too, it's a nonlinear effect.
Also take a look at the spreadsheet I linked, and try this: calculate the difference in 199A deduction with each $1k of extra QBI by taking the difference between the values in column C. Below the phaseout, it's $200. This makes sense; an extra $1000 of income means 20% of that gets added to the deduction. Once the phaseout starts, the deduction starts to go DOWN at $280 per $1k of QBI. As more income gets added and it goes deeper in the phaseout range, the loss of deduction INCREASES. The last $1k of QBI that completely phases out the deduction drops it by $676. Because the deduction gets shrunk at an increasing rate, marginal tax rate goes UP during this range, which means the second derivative is not zero.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Question. If looking at say 50,000 why wouldn't the analysis break it up into the constituent brackets and compare the rates? In other words, it doesn't make sense to me to make a determination on the whole fifty thousand when it's not necessary during the contributing phase to make it 100% roth or trad. You can do fifty fifty or 80/20 etc
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I've mentioned this exact thing several times, unless I'm misunderstanding you. Here's one of several examples in this thread:Lee_WSP wrote: ↑Sat Jun 01, 2019 3:11 pmQuestion. If looking at say 50,000 why wouldn't the analysis break it up into the constituent brackets and compare the rates? In other words, it doesn't make sense to me to make a determination on the whole fifty thousand when it's not necessary during the contributing phase to make it 100% roth or trad. You can do fifty fifty or 80/20 etc
Isn't this basically what you're saying?Kevin M wrote: ↑Wed May 29, 2019 2:54 pm<snip>
If the last dollar (or $50 or $100) of a traditional IRA or 401k contribution knocks you into the next lower tax bracket, or has some other effect on deduction, credit, or subisidy phaseins or phase outs, then there is more than one marginal tax rate involved in the decision. The marginal rate on the last $100 of change in taxable income might not be the main marginal rate that drives the decision, even though you might tell someone that that is your current marginal tax rate, and it is the rate that might determine your next decision.
I would not call the average of more than one marginal tax rate involved in a decision the marginal tax rate. I would call it what it isthe average of the marginal tax rates on that particular increment of income.
Kevin
....... Suggested format for Asking Portfolio Questions (edit original post)
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Yes, but the example in the wiki i was linked to talks about how you have to average the tax rate, which is not necessary, because you can and should break up the contributions by taxable bracket. Not sure if all the examples are that way, but some people in this thread seem to be set on an average or effective tax rate. I could be misinterpreting this.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I’m away on a trip and will reply as I get some time (or when you start a topic on 199A, so I don’t clutter this)...but I have to say this, as a former student of biology and math.fyre4ce wrote: ↑Thu May 30, 2019 5:06 pmNot trying to hide behind numbers As you might guess I work in a field where I use math, including calculus, on a regular basis  regular enough to keep up my skills, I guess.gilgamesh wrote: ↑Thu May 30, 2019 4:31 pm
I have to say this now...you are hiding behind numbers
I’ve been on healthcare field for 25 years, and thus have been away from numbers for too long.
When I left, I was contemplating how I could make sense of time derivative of charge being current with relativity ...the World Wide Web was barely coming to existence then...I think the primitive search engine was called beaver, until then it was all dos commands ...my major was biology lol (In the 25 years I’ve never looked back, except I did look up on Fermat’s last theorem and saw it was solved) . Those days are long gone...I’m @ a high school level now...barely.
I spelled out how the change in tax bracket @400k makes the second derivative nonzero...Unless you spell it out like that, it’s not going to make much sense for me. Not that it need to....however it’s obvious our tax code is complex enough that some will face other factors. However no one can escape tax brackets. When it comes to 199A deduction, can you tell me any other factor other than change in tax brackets at $400k for MFJ that will render the second order derivative nonzero for every single person filing taxes as MFJ and utilizing the 199A deduction  spoken language please.
I'll try to explain it as best as I can. The 199A deduction means that a percentage of income (up to 20% if it's all QBI) gets subtracted from taxable income. When you're in the phaseout and your income increases, two things happen simultaneously. The first is that the percentage of this deduction you're entitled to shrinks linearly, from 20% at $315k to 0% at $415k. The second is that the deduction itself gets bigger, due to more QBI. So, you're losing an increasing percentage of a growing number  that's a secondorder effect. If it were an increasing percentage of a constant number, the second derivative would be zero. But when you take the second derivative of a Q^2 term, you don't get zero, you get a nonzero constant. I know the calculus may be intimidating, but just focus on the formula for taxes due in the phaseout, toward the top of the page. Look at the deduction term: 20% * Q * [stuff in parenthesis with a Q in it] * TB. The parentheses have a Q inside, so there's a Q^2 term in there. This means that the tax due is, in part, a function of QBI^2. In other words, the tax rate ramps up with income too, it's a nonlinear effect.
Also take a look at the spreadsheet I linked, and try this: calculate the difference in 199A deduction with each $1k of extra QBI by taking the difference between the values in column C. Below the phaseout, it's $200. This makes sense; an extra $1000 of income means 20% of that gets added to the deduction. Once the phaseout starts, the deduction starts to go DOWN at $280 per $1k of QBI. As more income gets added and it goes deeper in the phaseout range, the loss of deduction INCREASES. The last $1k of QBI that completely phases out the deduction drops it by $676. Because the deduction gets shrunk at an increasing rate, marginal tax rate goes UP during this range, which means the second derivative is not zero.
It is unfathomable that a person will invent a whole field of mathematics (calculus) to explain what’s in his mind...it’s even more unfathomable a clerk in a patent office will improve on the former. In biology you know the man who took a journey on HMS Beagle and revealed to the world, the origin of species...IMO, one man leaves them all behind in the dust  A Monk who grew pea pods in his monastery and saw fit to count them  with the pea pods, he solved the puzzle of what makes not only us but all living beings on this planet. I think pea pods beats calculus any day of the week
P.S: Newton, Einstein, Darwin and my man, Gregor Mendel  he carried over something that wasn’t even there.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Here is an example: You have $20K to invest. If you invest it all in Roth, you will traverse three marginal rates, with the first batch taxed at 10%, the second batch at 50%, and the third batch at 10%, such that the total $20K will be taxed at an average rate of 15% (i.e. $3K in tax). The first two rate bands are equal, such that the average rate over those two is 30% (the bands end up being widths $2.5K, $2.5K, $15K). You expect to pay 20% tax when withdrawing these funds.Lee_WSP wrote: ↑Sat Jun 01, 2019 3:11 pmQuestion. If looking at say 50,000 why wouldn't the analysis break it up into the constituent brackets and compare the rates? In other words, it doesn't make sense to me to make a determination on the whole fifty thousand when it's not necessary during the contributing phase to make it 100% roth or trad. You can do fifty fifty or 80/20 etc
So, when looking at the first batch, you say "10% now versus 20% in retirement  I will use Roth". You look at the second batch and say "50% now versus 20% in retirement  I will use Traditional". But now because you are starting to invest in Traditional, you never reach the 3rd marginal rate of 10%, which would have lowered your average rate down to 15%. Instead, you keep investing in Traditional because you don't want to enter that narrow 50% marginal rate band with Roth dollars, even though, once you break through, you would have been paying 10% on the remaining Roth dollars. The only way to reach the 3rd marginal rate of 10% is to invest in Roth at the 2nd marginal rate of 50%. You need to tunnel through the barrier to reach the other side.
To make the correct decision in this case, you need to calculate the average rate over the full $20K to see if it is less than 20% (actually it is better to calculate the average rate over the last two batches to see if it is worthwhile to tunnel through the 50% barrier  it is clear that using Roth for the first batch is best). And the average rate depends on the relative widths of the marginal rate bands  you can't just use the two rates (10% and 50%) by themselves to make the decision.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Your example has no basis in actual brackets other than the one off cliffs, which are taken care of once per year by deducting the correct amount of trad.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
There is a fairly common actual situation with brackets out of order. If you earn enough in Social Security, you may still be in the phasein of SS taxation when your income reaches the top of the 12% bracket. Thus you have income with a marginal tax rate of 22.2% (because every $1 of ordinary income also makes 85 cents of SS taxable at 12%), then 40.7% (because every $1 of ordinary income also makes 85 cents of SS taxable at 22%), then back to 22% (when the maximum 85% of SS is taxable and thus every $1 of income is taxed at 22%). In this situation, it may be worth converting a traditional IRA to a Roth IRA up to the top of the 22% or even the 24% bracket this year, eating the 40.7% hump for one year, in order to avoid paying the hump tax in future years.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
That is a situation that arises only in retirement. Unless one is a few years away from that point, how can you accurately predict this will in fact occur? All we can say for sure is that the tax rate I am paying today on $X is Y%. When I retire, I plan to have $Z and they'll be taxed at A%.grabiner wrote: ↑Sun Jun 02, 2019 1:48 pmThere is a fairly common actual situation with brackets out of order. If you earn enough in Social Security, you may still be in the phasein of SS taxation when your income reaches the top of the 12% bracket. Thus you have income with a marginal tax rate of 22.2% (because every $1 of ordinary income also makes 85 cents of SS taxable at 12%), then 40.7% (because every $1 of ordinary income also makes 85 cents of SS taxable at 22%), then back to 22% (when the maximum 85% of SS is taxable and thus every $1 of income is taxed at 22%). In this situation, it may be worth converting a traditional IRA to a Roth IRA up to the top of the 22% or even the 24% bracket this year, eating the 40.7% hump for one year, in order to avoid paying the hump tax in future years.
Further, when you do your withdrawals, you have the choice of withdrawing the Roth or Trad dollars (unless you've got RMD's), so you can manipulate that tax rate to a much much greater degree than today's Roth or trad contributions.
edit:
Further, if we're looking at the back end (retirement) and you want to maximize that lower bracket, the question is not should I do Roth vs Trad, the question is: How much %/$ Roth & %/$ Trad should my retirement portfolio have? From there, you can work backwards/forwards to today and determine how much Roth to set aside each year.
Otherwise, the question is as simple as:
What's the marginal tax rate I'll be paying now on that next bracket of contributions vs what's the marginal rate of taxes I'll be paying during retirement based on withdrawing $X amount.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
And how do you determine the correct amount of Traditional versus Roth? Please provide a worked out example, perhaps with the very real SS hump.
Once you are taking SS, it is too late to do anything about it, but pay more in taxes than you needed to.
While it is difficult to predict exactly how taxation will turn out in the future, one can make reasonable estimates based on current rates. If you expect your income needs or RMD's in retirement will put you in the 22% or higher bracket for MFJ (or 24% bracket for single), then you don't need to worry as much about the SS hump. Or if your income needs will be $20K or less, the same is probably true. But for those of us that expect our income needs or RMD's will put us in the 12% bracket for MFJ (or 12%/22% for single), then our marginal rates will be affected by the SS hump and we should carefully consider Traditional vs Roth while contributing and doing Roth conversions in early retirement, as grabiner noted above. The best way to evaluate tax rates with SS is to compute the average rate while tunneling through the hump.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Sure. Tell give me the estimated hump in your situation and what you're choices are. We can work through it together.rkhusky wrote: ↑Sun Jun 02, 2019 5:39 pmAnd how do you determine the correct amount of Traditional versus Roth? Please provide a worked out example, perhaps with the very real SS hump.
Once you are taking SS, it is too late to do anything about it, but pay more in taxes than you needed to.
While it is difficult to predict exactly how taxation will turn out in the future, one can make reasonable estimates based on current rates. If you expect your income needs or RMD's in retirement will put you in the 22% or higher bracket for MFJ (or 24% bracket for single), then you don't need to worry as much about the SS hump. Or if your income needs will be $20K or less, the same is probably true. But for those of us that expect our income needs or RMD's will put us in the 12% bracket for MFJ (or 12%/22% for single), then our marginal rates will be affected by the SS hump and we should carefully consider Traditional vs Roth while contributing and doing Roth conversions in early retirement, as grabiner noted above. The best way to evaluate tax rates with SS is to compute the average rate while tunneling through the hump.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I think you are just suggesting a very rough guideline, but to be specific, this is not correct. With $50K of nonSS taxable "modified income"* and $20K of SS income, MFJ, you will pay tax on 85% of your SS income, so you've already pushed through the hump, even though you still are in the 12% bracket.
In general, I don't think it's a good idea to think too much in terms of tax brackets, since marginal tax rates can be very different than tax brackets.
Kevin
* Modified income is 1040 lines 1, 2a, 2b, 3b, 4b, and Schedule 1, line 22.
Last edited by Kevin M on Sun Jun 02, 2019 9:04 pm, edited 1 time in total.
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Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
You actually can be well below that and still be through the hump. I incorrectly said "nonSS taxable income" of $50K, but the $50K is before deductions; my tax software calls this "modified income".
With $50K of nonSS modified income and $20K of SS income, you are taxed on 85%, or $17K, of SS income, for an AGI of $67K (= $50K + $17K). After the 2018 standard deduction of $25.3K, taxable income is $41.7K, which is way below the top of the 12% bracket for MFJ at $77.4K.
Kevin
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Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
$20K pension, $30K SS, $60K Roth/Traditional IRA withdrawal. Contribution tax rate is 15%.
Last edited by rkhusky on Sun Jun 02, 2019 9:24 pm, edited 1 time in total.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Take a look at the "Irregular marginal rates" section of the draft article. I worked an example where the rates are irregular on the contribution side. The algorithm involves looking for the highest average contribution rate, making that contribution, then looking forward again for that point and looking for the highest rate again. Repeat until you hit the legal contribution limit or the rate drops below the predicted withdrawal rate.Lee_WSP wrote: ↑Sun Jun 02, 2019 2:23 pmThat is a situation that arises only in retirement. Unless one is a few years away from that point, how can you accurately predict this will in fact occur? All we can say for sure is that the tax rate I am paying today on $X is Y%. When I retire, I plan to have $Z and they'll be taxed at A%.grabiner wrote: ↑Sun Jun 02, 2019 1:48 pmThere is a fairly common actual situation with brackets out of order. If you earn enough in Social Security, you may still be in the phasein of SS taxation when your income reaches the top of the 12% bracket. Thus you have income with a marginal tax rate of 22.2% (because every $1 of ordinary income also makes 85 cents of SS taxable at 12%), then 40.7% (because every $1 of ordinary income also makes 85 cents of SS taxable at 22%), then back to 22% (when the maximum 85% of SS is taxable and thus every $1 of income is taxed at 22%). In this situation, it may be worth converting a traditional IRA to a Roth IRA up to the top of the 22% or even the 24% bracket this year, eating the 40.7% hump for one year, in order to avoid paying the hump tax in future years.
Further, when you do your withdrawals, you have the choice of withdrawing the Roth or Trad dollars (unless you've got RMD's), so you can manipulate that tax rate to a much much greater degree than today's Roth or trad contributions.
edit:
Further, if we're looking at the back end (retirement) and you want to maximize that lower bracket, the question is not should I do Roth vs Trad, the question is: How much %/$ Roth & %/$ Trad should my retirement portfolio have? From there, you can work backwards/forwards to today and determine how much Roth to set aside each year.
Otherwise, the question is as simple as:
What's the marginal tax rate I'll be paying now on that next bracket of contributions vs what's the marginal rate of taxes I'll be paying during retirement based on withdrawing $X amount.

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Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
And this hypothetical is trying to figure out how to allocate what/how much ?
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Easy. You contribute up to the maximum ceiling of the 15% contribution bracket to a Roth. The rest in Trad.rkhusky wrote: ↑Mon Jun 03, 2019 8:35 amMFJ.
Roth/Traditional split for contributions at 15% contribution rate.
Roth/Traditional split for contributions at 22% contribution rate.
Roth/Traditional split for withdrawals.
Then during retirement, you alternate your withdrawals as follows:
1 year all Trad + Roth conversions up to the bracket ceiling.
Next year all Roth up to the 60k living expenses per fact pattern.
Repeat until Trad account is depleted or you're facing RMD's.
edit: Or even more efficiently:
DAlternate your withdrawals as follows:
1 year all Trad + Roth conversions up to the bracket ceiling.
Next year Trad up to the SS cliff the rest Roth up to the 60k living expenses.
Last edited by Lee_WSP on Mon Jun 03, 2019 12:41 pm, edited 1 time in total.
 dodecahedron
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Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Not at all too late to do anything about it after taking SS. Opportunistically timed Roth conversions (particularly in conjunction with lumpy charitable giving) can continue to address the issue even after you are taking SS, as grabiner pointed out.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Correct, but since this is a narrow scope situation regarding whether to contribute to a Roth vs Trad during the accumulation phase, the Roth conversions later in life are beyond the scope.dodecahedron wrote: ↑Mon Jun 03, 2019 12:38 pmNot at all too late to do anything about it after taking SS. Opportunistically timed Roth conversions (particularly in conjunction with lumpy charitable giving) can continue to address the issue even after you are taking SS, as grabiner pointed out.
 dodecahedron
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Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Not everyone making decisions about contributing to Roth vs Trad is necessarily in the accumulation phase. It is worth noting that there are folks (like mestill working parttime and may do so indefinitely, which can delay RMDs) who face decisions about contributing to Roth vs Trad but are not in the accumulation phase.Lee_WSP wrote: ↑Mon Jun 03, 2019 12:40 pmCorrect, but since this is a narrow scope situation regarding whether to contribute to a Roth vs Trad during the accumulation phase, the Roth conversions later in life are beyond the scope.dodecahedron wrote: ↑Mon Jun 03, 2019 12:38 pmNot at all too late to do anything about it after taking SS. Opportunistically timed Roth conversions (particularly in conjunction with lumpy charitable giving) can continue to address the issue even after you are taking SS, as grabiner pointed out.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I personally feel that conversions are best addressed in a separate article. In practicality, whether the income made is going into a Roth or Trad is inconsequential. The end result will be X in Roth (either through conversions or direct contributions) at the end of the year anyway.dodecahedron wrote: ↑Mon Jun 03, 2019 12:52 pmNot everyone making decisions about contributing to Roth vs Trad is necessarily in the accumulation phase. It is worth noting that there are folks (like mestill working parttime and may do so indefinitely, which can delay RMDs) who face decisions about contributing to Roth vs Trad but are not in the accumulation phase.Lee_WSP wrote: ↑Mon Jun 03, 2019 12:40 pmCorrect, but since this is a narrow scope situation regarding whether to contribute to a Roth vs Trad during the accumulation phase, the Roth conversions later in life are beyond the scope.dodecahedron wrote: ↑Mon Jun 03, 2019 12:38 pmNot at all too late to do anything about it after taking SS. Opportunistically timed Roth conversions (particularly in conjunction with lumpy charitable giving) can continue to address the issue even after you are taking SS, as grabiner pointed out.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
The way it's currently written, there's one line about conversions in the General guidelines section, which includes a link to the conversion page. I think this is appropriate  the concepts are related enough that readers should be aware that conversions are possible, and a rough idea of when they should do them. For more details they can consult the conversion page. I thought this was a good balance of how much information to provide, but I'm open to suggestions for changing this.Lee_WSP wrote: ↑Mon Jun 03, 2019 1:24 pm
I personally feel that conversions are best addressed in a separate article. In practicality, whether the income made is going into a Roth or Trad is inconsequential. The end result will be X in Roth (either through conversions or direct contributions) at the end of the year anyway.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I did not see any changes I would suggest regarding conversions in the draft article.fyre4ce wrote: ↑Mon Jun 03, 2019 3:01 pmThe way it's currently written, there's one line about conversions in the General guidelines section, which includes a link to the conversion page. I think this is appropriate  the concepts are related enough that readers should be aware that conversions are possible, and a rough idea of when they should do them. For more details they can consult the conversion page. I thought this was a good balance of how much information to provide, but I'm open to suggestions for changing this.Lee_WSP wrote: ↑Mon Jun 03, 2019 1:24 pm
I personally feel that conversions are best addressed in a separate article. In practicality, whether the income made is going into a Roth or Trad is inconsequential. The end result will be X in Roth (either through conversions or direct contributions) at the end of the year anyway.
As it stands, my biggest criticism is the length. It's very long and a tough slog for an average or even educated person to get through. I'm not sure how to fix it per se other than having a hundred hyperlinks to separate articles & examples, but it is long.
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Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Even leaving conversions aside, there are folks who are working AND collecting Social Security, who need to make the decision about whether to contribute Roth or traditional. Continuing to make traditional contributions after beginning SS can sometimes help such folks with the SS hump, which is why I took issue with the ¨Once you are taking SS, it is too late to do anything about it, but pay more in taxes than you need to.¨ I will start collecting SS widow´s benefits when they maximize at my FRA later this year, and contributing to traditional or Roth remains on the table for me.Lee_WSP wrote: ↑Mon Jun 03, 2019 1:24 pmI personally feel that conversions are best addressed in a separate article. In practicality, whether the income made is going into a Roth or Trad is inconsequential. The end result will be X in Roth (either through conversions or direct contributions) at the end of the year anyway.dodecahedron wrote: ↑Mon Jun 03, 2019 12:52 pmNot everyone making decisions about contributing to Roth vs Trad is necessarily in the accumulation phase. It is worth noting that there are folks (like mestill working parttime and may do so indefinitely, which can delay RMDs) who face decisions about contributing to Roth vs Trad but are not in the accumulation phase.Lee_WSP wrote: ↑Mon Jun 03, 2019 12:40 pmCorrect, but since this is a narrow scope situation regarding whether to contribute to a Roth vs Trad during the accumulation phase, the Roth conversions later in life are beyond the scope.dodecahedron wrote: ↑Mon Jun 03, 2019 12:38 pmNot at all too late to do anything about it after taking SS. Opportunistically timed Roth conversions (particularly in conjunction with lumpy charitable giving) can continue to address the issue even after you are taking SS, as grabiner pointed out.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I'm not going to debate this fine detail. I see your point, but my comment was just a broad statement in a argument being made on the internet.dodecahedron wrote: ↑Mon Jun 03, 2019 3:43 pmEven leaving conversions aside, there are folks who are working AND collecting Social Security, who need to make the decision about whether to contribute Roth or traditional. Continuing to make traditional contributions after beginning SS can sometimes help such folks with the SS hump, which is why I took issue with the ¨Once you are taking SS, it is too late to do anything about it, but pay more in taxes than you need to.¨Lee_WSP wrote: ↑Mon Jun 03, 2019 1:24 pmI personally feel that conversions are best addressed in a separate article. In practicality, whether the income made is going into a Roth or Trad is inconsequential. The end result will be X in Roth (either through conversions or direct contributions) at the end of the year anyway.dodecahedron wrote: ↑Mon Jun 03, 2019 12:52 pmNot everyone making decisions about contributing to Roth vs Trad is necessarily in the accumulation phase. It is worth noting that there are folks (like mestill working parttime and may do so indefinitely, which can delay RMDs) who face decisions about contributing to Roth vs Trad but are not in the accumulation phase.Lee_WSP wrote: ↑Mon Jun 03, 2019 12:40 pmCorrect, but since this is a narrow scope situation regarding whether to contribute to a Roth vs Trad during the accumulation phase, the Roth conversions later in life are beyond the scope.dodecahedron wrote: ↑Mon Jun 03, 2019 12:38 pm
Not at all too late to do anything about it after taking SS. Opportunistically timed Roth conversions (particularly in conjunction with lumpy charitable giving) can continue to address the issue even after you are taking SS, as grabiner pointed out.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I agree that the current article is long. What do you suggest with regard to reducing length? Certain content could be either removed completely or moved to other pages. Another option would be to reorganize, having a basic section up top and moving the longer examples and more special cases (Social Security, bracket splitting, etc) later down in one big "complex cases" section.Lee_WSP wrote: ↑Mon Jun 03, 2019 3:25 pm
I did not see any changes I would suggest regarding conversions in the draft article.
As it stands, my biggest criticism is the length. It's very long and a tough slog for an average or even educated person to get through. I'm not sure how to fix it per se other than having a hundred hyperlinks to separate articles & examples, but it is long.
Speaking of which, who added the content at the very bottom about optimizing around the Saver's credit? Maybe it was FiveK? I'm definitely willing to consider including it, but I think it needs some more words for context, and preferably the math should be converted to "pretty print" <math></math> display.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Good to know that you are willing to consider including it.
Yes, if others see no errors then it's worth taking the time to make it look better.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
I'll take a third look and get back to you.fyre4ce wrote: ↑Mon Jun 03, 2019 5:27 pmI agree that the current article is long. What do you suggest with regard to reducing length? Certain content could be either removed completely or moved to other pages. Another option would be to reorganize, having a basic section up top and moving the longer examples and more special cases (Social Security, bracket splitting, etc) later down in one big "complex cases" section.Lee_WSP wrote: ↑Mon Jun 03, 2019 3:25 pm
I did not see any changes I would suggest regarding conversions in the draft article.
As it stands, my biggest criticism is the length. It's very long and a tough slog for an average or even educated person to get through. I'm not sure how to fix it per se other than having a hundred hyperlinks to separate articles & examples, but it is long.
Speaking of which, who added the content at the very bottom about optimizing around the Saver's credit? Maybe it was FiveK? I'm definitely willing to consider including it, but I think it needs some more words for context, and preferably the math should be converted to "pretty print" <math></math> display.
But off hand, changing the back end to make the format more readable would be a big plus regardless. Ie shrinking the horizontal width to say 800 px.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Bear in mind that the wiki supports mobile devices. I generally keep tables to 600px max.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
It looks perfectly fine on mobile devices, but auto fills the whole screen on a desktop. On my wide screen monitors, it's a very long line of text.
Contrast to the new York times and other media companies which center the text column and limit the width making reading a lot easier on the eyes.
Just a thought. The workaround is shrinking the window. And I understand that the software code isn't exactly an easy thing to mess with. But if it's an easy fix, it would improve desktop readability.
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Limiting the width is a back end fix. Unless there's a layout option off to the side when you do your editing, it's not a single button click.
In general, you can cut out any examples that have a main article this article links to. In other words, it's purely extra. The reader can just click the link if needed.
Okay, here's my thoughts by section:
General Guidelines
The bullet points can be whittled down to the very basic ones: You should have both so you have flexibility in retirement; either is better than taxable; prefer Roth if current rates are lower than future rates; and vice versa.
Chop out the section starting with: "For the self employed..." to the next section. It's unnecessary to understand the article. A simple: deductible vs Roth definition will do.
Marginal Tax Rates
Maybe it'd make more sense to the reader to think about it as "your going to be withdrawing $X no matter what" just as you need to be making $Y today just to meet your current expenses and that's why we look at marginal rates.
Marginal tax rate in retirement
Could you shorten the whole "calculate your income in retirement" to make an educated guess as to retirement income? Could cut out a few paragraphs that way.
Estate Planning
It's a little hard to say what bracket one's heirs will be in unless you die tomorrow. Or they are disabled.
Irregular marginal rates
analysis
It's simpler to say contribute to trad to get the deduction necessary so you qualify for the credit. Then do the analysis of Roth v Trad.
Other Situations
This looks and reads like a math equation.