Author Topic: Advice for Lowering Tax Bracket  (Read 1540 times)

Edwards

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Advice for Lowering Tax Bracket
« on: May 05, 2019, 11:08:40 AM »
First of all, feel free to correct me if my information is wrong, and I thank anyone and everyone for taking the time to help. 

For 2019 taxes (next year), there is a 12% tax rate on $9,701-39,475 taxable income.

I would like to try and make sure I fall into this bracket but am not entirely sure what is considered when calculating this figure.

Specifically, I have a Vanguard brokerage account and receive a 1099-DIV each year for it (comprising of "totally ordinary dividends" and "qualified dividends").  Do any of the figures from these sections count towards my entire taxable income?

Thanks again for the help!

Note: I am more than happy to include any additional information needed/required but did not want to overwhelm people with the specifics of my case unless necessary.

MDM

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Re: Advice for Lowering Tax Bracket
« Reply #1 on: May 05, 2019, 11:44:46 AM »
Did you file a return for 2018?

See https://www.irs.gov/forms-pubs/about-form-1040.  It would likely be worthwhile for you to fill out form 1040 (and any needed schedules) by hand.  If you have a 2018 return, you can use that to check your work.  If not, pretend you are doing your 2019 return and estimate the numbers.

After doing that, can you answer your original question?


Edwards

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Re: Advice for Lowering Tax Bracket
« Reply #2 on: May 05, 2019, 01:10:54 PM »
Did some additional research and realized my tax bracket is not as big a deal as I thought it was. 
I assumed it was an all or nothing idea, regarding your taxable income and the tax rate %.

This video explains it really well, maybe it can help someone as befuddled as I was.

https://www.youtube.com/watch?v=VJhsjUPDulw

HPstache

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Re: Advice for Lowering Tax Bracket
« Reply #3 on: May 05, 2019, 01:27:12 PM »
Did some additional research and realized my tax bracket is not as big a deal as I thought it was. 
I assumed it was an all or nothing idea, regarding your taxable income and the tax rate %.

This video explains it really well, maybe it can help someone as befuddled as I was.

https://www.youtube.com/watch?v=VJhsjUPDulw

Yes.  Sounds like you had a very common misconception about the tax code.  Only the dollars above the 12% threshold are taxed as the next higher bracket rate.

Livingthedream55

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Re: Advice for Lowering Tax Bracket
« Reply #4 on: May 06, 2019, 09:27:33 AM »
Neat tool here:   

https://engaging-data.com/tax-brackets/

I believe developed by a member of these boards