high-income taxpayers and retirement

        In the wake of ATRA, high-income taxpayers have to consider whether distributions from their retirement accounts will put them into the highest income tax bracket. A taxpayer might think they are in a lower tax bracket, but the distribution from a retirement account could potentially put them in the highest bracket, he said.

For instance, if you’re single and your income is around $380,000 by the end of the year, it might not be worth taking a distribution of more than $20,000 from your IRA if you can avoid it. Income over $400,000 will be taxed at the 39.6% rate rather than the 35% rate.

“Now would be the time for retirees and would-be retirees to talk with their tax professionals and financial planners to see how all of these different moving parts are going to impact their distributions going forward,” said Paré.