Nonetheless, adding a Roth conversion at that point would
come at the marginal rate, regardless of what they had already paid on prior income.
Not exact matches
how does the left explain the constant collection
rate,
coming in
at 19.5 %, despite the fluctuation in the
marginal rate.
This means that the
rates remained
at 10 %, 15 %, 25 %, 28 %, 33 %, and 35 % for taxpayers
coming from the middle class, while increasing the top
marginal rate.
If you stay
at the 28 %
marginal rate, or even drop slightly to 25 %, the straight conversion
comes out ahead, although the edge will likely be relatively modest.
if you use the theory of bowwering 100k to invest, the interest will always be deductable
at your top
marginal rate every year reguardless of the investment out
come.
It should not surprise you that there is a big difference between a short - term trader whose returns all
come from short - term gains taxed
at the
marginal income tax
rate, and a typical active mutual fund that generates its returns from a combination of short - term gains and the lower - taxed long - term capital gains and dividends.
For example, if you have a 5 %
rate mortgage on your home, you could invest in a 3.5 % municipal bond and still
come out ahead when you apply the tax deduction to your income
at a 44 % (33 % federal + 7 % state + 4 % city in NYC)
marginal tax
rate.
To
come out ahead, the current tax
rate at the time of conversion must be lower than what the
marginal tax
rate would be in the future.