For 2016, we actually ended up in a negative taxable bracket (-3.5%) and they paid us back even more than we paid in - but this is likely a one off year as it is the last one we can claim earned income and fill up our traditional IRAs (Gotta love that saver's credit!).The saver's credit is indeed a wonderful thing. Must be some other credit (earned income? child tax? ...?) that put you into a negative tax bracket, as the saver's can't drop you any lower than $0.
No kids. But we also qualified for subsidies on ACA, and it was more than originally estimated due to our income being much lower than last time, so they paid us back for that as well. Otherwise, our actual earned income was under $16K for the entire year (husband left work in the first quarter 2016, received unemployment until fall 2016). I've never seen a tax rate go negative before either, and it might have been TurboTax's way of phrasing it (as "effective tax rate") but I guess it was a perfect storm of managing our tax liabilities and making sure to take advantage of every single tax break available with a perceived low income. I ran the numbers several times and then ended up using TurboTax to file, and it all checked out. Totally weird, but kind of cool. I had expected to break even (only getting back what we paid in on fed taxes).
Also, I'm in the same situation as Spork (inherited a large IRA) and expected to pay out taxes one way or another instead of being able to follow the CurryCracker no tax path.
My current working plan is to keep our actual expenses low and using the inherited IRA for most of the expenses which will result in slowly depleting the iIRA so it won't grow to such a huge amount that I'll be forced to deal with giant iIRA distributions (and pushed into higher taxable brackets) over the next decade, and still manage to pay little to no taxes overall.
Basically, I am taking 2/3 of our expenses from the iIRA (thus depleting it while also satisfying the RMD each year) and then the remaining 1/3 of expenses comes from the taxable LTCD/dividends. I remain in the 15% taxable bracket this way and don't end up owing anything on the LTCG/dividends, and little to no tax on the iIRA distributions either.