Lowering tax bracket for taking capital gains?

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Topic Author
zorobabel
Posts: 26
Joined: Thu Sep 27, 2018 9:36 pm

Lowering tax bracket for taking capital gains?

Post by zorobabel »

This year I will most likely be at the lower edge of the 22% fed bracket (65k taxable + 40k taxable + 3.5k contracting + 2-3k in dividends).

Spouse will max her pre-tax 401k (already reflected in the 40k above).
Both will max out Roth IRAs (unless I decide for trad for reasons explained a few lines down).
A pension for myself could very well be in the picture at retirement, so my retirement tax bracket might not be the lowest.
I will be contributing maybe 10k to a Roth 401k at the place of employment. I could also contribute to a 403b, preferably pre-tax. I am thinking of contributing to the pre-tax enough to get me at least Xk under 80k taxable so we stay in the 12% bracket and pocket some LT capital gains at 0%.

Considering the plan above am I shooting myself in the foot? Would I be better of contributing more to the ROTH 401k?
Or contribute to pre-tax just enough to get us in the 12% bracket and instead of the capital gains just contribute more to the Roth 401k?
Or just max Roth 401k regardless of bracket?
The reason for realizing gains would be the hypothetical purchase of a house if things calm down.
Thanks.
brad.clarkston
Posts: 1726
Joined: Fri Jan 03, 2014 7:31 pm
Location: Kansas City, MO

Re: Lowering tax bracket for taking capital gains?

Post by brad.clarkston »

To me that's a lot of "maybe" the only guaranteed thing in that group is always maxing out the Roth until they make you stop.
70% AVGE | 20% FXNAX | 10% T-Bill/Muni
Topic Author
zorobabel
Posts: 26
Joined: Thu Sep 27, 2018 9:36 pm

Re: Lowering tax bracket for taking capital gains?

Post by zorobabel »

Thank you Brad!
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