Imagine that your gross income is $135 thousand, your taxable income is $109 thousand, and the federal
Question:
Imagine that your gross income is $135 thousand, your taxable income is $109 thousand, and the federal tax brackets are as follows:
0-9k: 10%
9-37k: 15%
37-89k: 25%
89-186k: 28%
186-405k: 33%
405k-407k: 35%
407k+: 39.6%
What would be the dollar amount of your total federal tax liability?
You have 6K of spare pre-tax income that you're looking to invest for the future. Today you are in a combined federal+state marginal tax bracket of 24%. You are anticipating that in 40 years your marginal tax bracket on your retirement income will be 16%.
If you decide to invest this money in a Roth IRA, and earn earn an average annual rate of return of 9.8%.
How much will you have in 40 years after withdrawing from the IRA?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill