tax bracket

mgar302 — Wed, 30 Oct 2024 17:34:13 GMT

I have been given 2 choices regarding stock that can either be a lump sum with 20% taxed or put the value in an inherited IRA. Will either put me in a higher tax bracket?

Re: tax bracket

marctu — Wed, 30 Oct 2024 17:51:29 GMT

This question is addressing how a beneficiary of a pre-tax IRA or other retirement account should take the distribution from a decedent's retirement account. The options you asked about are first a Lump Sum, which is where a beneficiary can withdraw the entire amount of the IRA all at once. There are five-year (non-individual), 10-year (non-spouse beneficiaries) and annual life expectancy payment options (spouse beneficiary), as well.

While there are no numbers associated with your question, more then likely a Lump-Sum is more then likely to push you into a higher tax bracket, since you are taking all the money at once. Taking it over 10 years, may put you in a higher tax bracket in a given year depending upon your other income for that year.

Thank you for your question @mgar302

All the best,

Marc T.

TurboTax Live Tax Expert

27 Years of Experience Helping Clients

Re: tax bracket

mgar302 — Wed, 30 Oct 2024 18:06:29 GMT

Thanks. I think I'll do the IRA

Re: tax bracket

marctu — Wed, 30 Oct 2024 18:10:50 GMT

You are welcome @ @mgar302

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