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progree

(10,864 posts)
11. How would you pay capital gains taxes if you are in the 12% ordinary tax bracket?
Fri Dec 20, 2019, 10:57 PM
Dec 2019

At that income level, the capital gains tax rate is 0%.

Whether or not you need money the size of your RMD or more (or less) for living expenses has nothing to do with the benefit (or not) of converting traditional IRAs to Roths. You pay your ordinary tax rate (12% you said in your OP) on every dime of that RMD whether you need it or not.

These are 2019 tax rates,

For married filing jointly:

taxable income (which is gross income - $24,400 standard deduction) is:
from $0 to $19,400: 10% tax bracket on ordinary income
from $19,401 to $78,950: 12% tax bracket on ordinary income
$78,951 to $168,400: 22% tax bracket on ordinary income
$168,401 to $321,450: 24% tax bracket on ordinary income
...

from 0 to $78,750: 0% capital gains tax rate
from $78,751 to $488,850: 15% capital gains tax rate
...

https://www.nerdwallet.com/blog/taxes/federal-income-tax-brackets/
https://www.nerdwallet.com/blog/taxes/capital-gains-tax-rates/?trk=tax_sidebar_link

About those RMDs (for the 70+ here) [View all] question everything Dec 2019 OP
Ah heck- James48 Dec 2019 #1
The Secure Act which was passed by both houses of Congress raises the RMD age requirement still_one Dec 2019 #2
Would have hurt us. At 70 and 1/2 we retired and needed the RMD question everything Dec 2019 #4
You don't have any regular taxable accounts to withdraw from? progree Dec 2019 #5
Yes, do. Most of it are securities that selling would generate capital gain question everything Dec 2019 #10
How would you pay capital gains taxes if you are in the 12% ordinary tax bracket? progree Dec 2019 #11
Oh. But one first has to take all the RMD and then can take extra to convert to Roth question everything Dec 2019 #12
Good luck 😂. I have to make my Roth conversion decision (yes/no/how much) in a few days progree Dec 2019 #13
To add and to thank you question everything Dec 2019 #14
I'm glad I helped in some way 😁 progree Dec 2019 #15
Qualified Dividends and Capital Gain Tax Worksheet question everything Dec 2019 #16
But don't you use TurboTax and don't they get it right (as far as qualified dividends)? progree Dec 2019 #17
Don't like surprises. Certainly not where money is invovled question everything Dec 2019 #18
Don't like surprises either, but whether I get a $2,000 refund in April or have to pay a $5,000 progree Dec 2019 #19
The ideal situation is one invests in such a way that the investments generate interest and dividend still_one Dec 2019 #6
Still, if you need to withdraw money for expenses, you want to withdraw it from taxable accounts progree Dec 2019 #3
Also for inherited IRAs there are several ways to take those RMDs, including annuitizing them still_one Dec 2019 #7
Yes, another option that looks real good to me is just donating the RMDs directly to charity -- progree Dec 2019 #8
Exactly, especially since for a lot of folks they can't itemize deductions, and this is a perfect still_one Dec 2019 #9
Latest Discussions»Culture Forums»Personal Finance and Investing»About those RMDs (for the...»Reply #11