IRS Tax Brackets and Tax Bracket Management

2020 IRS Tax Brackets

Tax Bracket Management:

Using the above chart, with optimal tax bracket management, a married couple currently earning $81,00 per year (ignoring RMDs) is in the 22% tax bracket, meaning that all income withdrawn from a qualified retirement account such as an IRA or 401(k) will be taxed at a minimum rate of 22%. Optimal tax bracket management would involve withdrawing an additional $245,000 in order to bring their income to the top of the 24% tax bracket, thus locking in the extremely low 24% tax rate. The money withdrawn could then be used to fund a Roth IRA or to put this money into the Living Trust Plus® Asset Protection Trust.

The financial strategy examples above are not financial advice and not intended to be used as the sole basis for financial decisions. Financial advice and specific strategies must be designed to meet the particular needs of your specific situation.