Income for single-filers
\nIncome for married couples filing jointly
\nMarginal Income Tax Rate<\/p>\n
$640,601 or more
\n$768,701 or more
\n37%<\/p>\n
$256,226 to $640,600
\n$512,451 to $768,700
\n35%<\/p>\n
$201,776 to $256,225
\n$403,551 to $512,450
\n32%<\/p>\n
$105,701 to $201,775
\n$211,401 to $403,550
\n24%<\/p>\n
$50,401 to $105,700
\n$100,801 to $211,400
\n22%<\/p>\n
$12,401 to $50,400
\n$24,801 to $100,800
\n12%<\/p>\n
$12,400 or less
\n$24,800 or less
\n10%<\/p>\n
Tax Brackets Can Be Used To Help Guide Your Withdrawal Strategy <\/p>\n
Patrick Huey, a CFP and owner of Victory Independent Planning, suggests that knowing where you fall within the tax brackets can help you make smarter decisions about which accounts you want to tap in retirement\u2014and in what order\u2014to minimize taxes.\n<\/p>\n
“The truth is, most retirement income<\/a>\u2014Social Security, pensions, and RMDs from IRAs and 401(k)s\u2014remains taxable, and the order and timing of withdrawals can have a huge effect on your tax bill,” said Huey.\n<\/p>\n For example, distributions from accounts like 401(k)s and traditional IRAs, are included in your taxable income<\/a> and are taxed at ordinary income tax rates<\/a>. If you’re not paying attention to where you fall within the tax bracket, the additional income from retirement account distributions can accidentally push yourself into a higher tax bracket.\n<\/p>\n Why This Matters to You<\/p>\n Income from certain retirement accounts, like 401(k)s and traditional IRAs, are taxable, so understanding what your income tax bracket is can help you decide which accounts to tap and how much to withdraw. You’ll want to know how much income you’ll have from these accounts, plus others, in 2026 so you know which bracket you fall into and what your tax bill will be come 2027.<\/p>\n Bill Shafransky, a Senior Wealth Advisor at MONECO Advisors, recommends that people who are on the cusp of higher tax brackets consider pulling money from other sources, such as savings accounts<\/a> or even taxable brokerage accounts<\/a>.\n<\/p>\n This is because selling assets in a taxable brokerage account could result in a long-term capital gain<\/a>. Since long-term capital gains tax rates are lower than ordinary income tax rates, you could save money by paying capital gains tax instead of ordinary income tax.\n<\/p>\n “So if we can keep people underneath that next bracket, that’s massively powerful for them, not just in the short-term, but also the long term as well,” Shafransky said.\n<\/p>\n Another consideration that retirees should keep in mind are RMDs. Starting at age 73, people generally must take withdrawals from 401(k)s and traditional IRAs.\n<\/p>\n “RMDs are a common bracket-buster<\/a>\u2014forcing you to take taxable income from your IRAs or 401(k)s even if you don\u2019t need it, often bumping people into higher brackets…,” Huey said.<\/p>\n Roth Conversions For the Win? <\/p>\n Because RMDs can result in hefty tax bills later in retirement, Valega is a fan of Roth conversions, as Roth accounts are not subject to RMDs.\n<\/p>\n