Tax Table vs Tax Brackets?

Question

The cutoff from 15 to the 25 percent tax bracket was around $63K last year for married/joint. When I look at the tax tables in the tax instruction booklets I don't see this rate jump when I do the math. Can someone explain this? I'm getting a distribution from my mom's IRA and am trying to figure out how to avoid jumping up in the tax bracket.

Answer 1

put the money into your own IRA and you avoid the tax implications, plus building your retirement savings, do a nice rollover and plan for your future--at least put most of it in IRA

I'm assuming this is with you as beneficiary of your deceased parent?

Answer 2

The tax tables reflect the brackets.  I don't think you understand what tax brackets mean.  When you cross into the next bracket, only the taxable income that's above the bracket limit is taxed at the higher amount, not your entire taxable income.  So when you look at the next line on the tax table, only that $50 increment at most is taxed at the 25% - everything below that limit is taxed the same as if you hadn't made that extra few dollars.