Do you "lock in" your tax bracket in 1998 or does it change each year?

i.e., Convert 100K, 25 each year. Tax bracket in '98 is 15% and jumps to 28% in '99, '00, and '01. Do you pay 15% of 25k all 4 years or 15% in '98 and 28% of 25k the other 3 years?

You don't "lock in" a tax bracket. 25k is added to your other income each year, and this total income determines the tax bracket each year. So,according to your info, your tax bracket in 1998 would be 15% and 28% for each of the next 3 years. However, if your income in any year increases considerably, such as having a large capital gain, you could possibly be thrown into a higher bracket. That's why spreading the income over 4 years can be a gamble when you don't know what is going to happen 3 or 4 years down the road.

While the tax rate may be uncertain, the four year spread keeps money in your hands for a longer period, a considerable benefit in the recent investment climate. You may also benefit if Congress cuts tax rates, or you move to a state (TX, AL, WY, NH, etc.) that does not have an income tax.