We are a retired couple (71 and 75) in the U.S. and we would like to do a voluntary IRA distribution so that we are maximizing the 15% tax bracket. In other words, we want to increase our taxable income to $75k for the year.

Our income so far is:

  • $15k in wages
  • $9k pension
  • $37k combined Social Security
  • $7k in combined minimum required distributions for two IRAs

My understanding is that 85% of our Social Security income is taxable, so I am calculating our AGI so far as:

$50k AGI = $15k (wages) + $9k (pension) + $31k (85% of SS) + $7k (IRA MRDs) - $12k (standard deduction)

Thus, it looks like we can do an additional $25k IRA distribution to make out the 15% tax bracket.

Have we overlooked anything in doing this calculation?

1 Answer 1


Your standard deduction is $12,600, but you are both over 65, an extra $2,500, so this line is $15,100. You also have two exemptions totaling $8000. I didn't see that on your list.

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The above is a screenshot from the TurboTax on line taxcaster page. It is free, asks for no person info, and you can quickly enter the data you wish.

I understand your goal, but you are in an odd point on the income curve, where the Phantom Tax Bracket kicks in. I link to an article I wrote some time ago, but will explain it here. When I bump your IRA withdrawal $1000, and then $2000, you'd expect your tax bill to jump $150, after all, that's the 15% bracket. But the SS taxation has you see an increase of $278, more than 25%. This effect continues until the full 85% of your SS is taxed. From the calculator, you can add $30K in withdrawals, and still not be in the 25% bracket, but the tax on that $30K will be $7578, an effective 25.26% marginal tax.

Note: I entered $36,500 as SS income, and then realized it was $37K. The rest of this answer really doesn't change for the sake of that $500. The taxation of SS is a real issue for you.

  • 1
    Most welcome, this is literally, "my best stuff," as it bring to light what I feel is a little understood part of the tax code that affects people at this level of income. So glad to share it with you. Commented Dec 6, 2015 at 18:11
  • It is great stuff indeed!
    – minou
    Commented Dec 6, 2015 at 18:26

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