IBKR Margin Tax Optimizer
Quantify the true after-tax cost of leveraged VOO positions and see how CA ↔ WA relocation rewrites the math. Built for top-bracket MFJ tech-worker households running core-satellite portfolios.
Effective after-tax margin cost
(side-by-side)Where each dollar of interest goes
Interest is allocated in order: first to bridge the standard-deduction gap, then to NII free fuel, then to elected LT, then to undeductible residual.
Adjust Your Numbers
Tax savings detail
| California | Washington | |
|---|---|---|
| Federal income tax saved | $5.2k | $5.2k |
| NIIT (3.8%) saved | $723 | $723 |
| CA state tax saved | $2.1k | — |
| LT election cost (15¢/$) | — | — |
| Net annual tax savings | $8.1k | $5.9k |
| WA cap-gains excise tax | — | — |
Optimal margin level
Post-rotation terminal state
Once the rotation completes, gains drop to zero. Only ordinary investment income remains as NII.
At that point, margin becomes a leveraged-VOO play, not a tax arbitrage. Plan to deleverage with W-2 income or hold for further compounding only if leverage still pencils on its own.
Insights
Household tax snapshot
Full-year tax estimate based on the inputs above. Wage income is backed out as AGI − capital gains − ordinary investment income. FICA uses the wage-earner count from Other Itemized Deductions.
| California | Washington | |
|---|---|---|
| Income | ||
| Wage income (W-2) | +$562k | +$562k |
| Short-term capital gains | +$9.0k | +$9.0k |
| Long-term capital gains | +$21k | +$21k |
| Ordinary investment income | +$8.0k | +$8.0k |
| Total taxable income (AGI) | $600k | $600k |
| Tax-advantaged savings (already excluded from AGI) | ||
| 401(k) total (employee + employer match, all earners) | +$33k | +$33k |
| HSA + FSA | +$1.0k | +$1.0k |
| Total tax-advantaged savings | $34k | $34k |
| Total compensation | $634k | $634k |
| Tax | ||
| Federal deduction used (itemized) | $47k | $47k |
| Federal income tax (ordinary) | −$125k | −$125k |
| Federal LT capital gains tax | −$4.2k | −$4.2k |
| NIIT (3.8%) | −$721 | −$721 |
| State income tax | −$46k | — |
| FICA (SS + Medicare) | −$23k | −$23k |
| WA cap-gains excise tax | — | — |
| Total tax | −$199k | −$153k |
| Effective tax rate | 33.2% | 25.5% |
| Margin interest paid | −$19k | −$19k |
| After-tax income (spendable cash) | $382k | $428k |
| Take-home income (cash + pre-tax savings) | $415k | $461k |
Estimates only. Assumes top federal bracket MFJ (35% + 3.8% NIIT, 20% LT). Standard deduction defaults to the 2026 MFJ $32,200 but is editable for age 65+ or scenario planning. SALT cap modeled per OBBBA: $40K base, phasing down by 30% of MAGI above $500K to a $10K floor at ~$600K. Not tax advice.
DISCUSSION
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