Policies – please read!
- Everyone can read posts, but to start a new topic or add a reply you’d need to register. To create an ID, please verify your email address. You will get a link at that email address and you can then pick a password.
- Be courteous to others. Treat others like you like to be treated. Discuss the issues. No ad-hominem attacks!
- It’s OK to include external links if they are relevant. But please avoid spamming! Please no affiliate links.
- Before starting a new topic, please check if that question/topic has been discussed before already and add to that discussion instead of starting a new topic.
- If you’ve written a cool blog post that you want to share with others please post this in the “Self-Promo” category only!
- The forum policies may be amended in the future!
Percentage to use for Tax Effect for IRA in Divorce
Hi there, I hope someone could help me. I am trying to figure out what percentage to use for the tax effect percentage that I should apply when calculating the amount that an IRA should be discounted. I say 20% to use on all pre tax account. I know it depends on the individual accounts, but my husband will probably not go for that. So I wanted to be able to use a standard percentage. Although he is in a very low tax bracket and I am in a high tax bracket, I am getting the short end of the deal. But, he will not go for using a lower percentage on his pretax accounts vs mine. Any help or insight would be very much appreciated.
I'm not an accountant. I would start with your current average (effective) tax rate, federal plus state.
Thank you. I was wondering if anyone knows if you would use a standard rate throughout. For example 20% for my pretax accounts and 20% for his pretax accounts, or do you base it on each person's tax bracket? Thank you
Yes I was going to use an average between my accounts and my soon to be ex's accounts. The thing is that I think he would want to use a standard percentage on both. He will not go for using a higher one for me and a lower one for him. Does anyone know what would be a good choice. I thought 20%, because it is somewhat an average between both of us. Any thoughts would be appreciated. Thank you.