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Slow to realize....
Old 12-30-2013, 04:59 PM   #1
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Slow to realize....

I've spent some time figuring out what are the key breakpoints for ACA subsidies and when to take SS (with an eye towards minimizing taxes by reducing work hours and IRA distributions) when I realized that I can give away as much as is needed to get at the efficient tax level. This feels much better than trying to minimize income. Silly, but so much easier, especially if there is paid work you enjoy. If you give, I recommend research via the Charity Navigator site.
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Old 12-30-2013, 07:04 PM   #2
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I've spent some time figuring out what are the key breakpoints for ACA subsidies and when to take SS (with an eye towards minimizing taxes by reducing work hours and IRA distributions) when I realized that I can give away as much as is needed to get at the efficient tax level. This feels much better than trying to minimize income. Silly, but so much easier, especially if there is paid work you enjoy. If you give, I recommend research via the Charity Navigator site.
I don't think it works that way. Charitable deductions are AFTER AGI. Yes, it will lower your taxes, but it won't lower your income for the purpose of ACA subsidies.

IRA contributions, HSA contributions, and a few other things lower your AGI, but itemized deductions on Schedule A do not.
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Old 12-30-2013, 10:16 PM   #3
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I don't think it works that way. Charitable deductions are AFTER AGI.
Correct. Charitable contributions, like all other itemized deductions, don't affect your income for ACA/subsidy purposes.
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Old 12-30-2013, 10:46 PM   #4
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Old 12-31-2013, 06:46 AM   #5
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Thank you. I obviously need to spend more time on the details. Appreciate the help.
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Old 12-31-2013, 06:54 AM   #6
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I believe the exception is direct transfer of RMDs to a charity if you are over 70.5. At least for 2013.
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Old 12-31-2013, 07:31 AM   #7
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I believe the exception is direct transfer of RMDs to a charity if you are over 70.5. At least for 2013.
Sure - because that is never recognized as income.

Same with gifting appreciated securities to charity - it is never recognized as income, so it doesn't show up in your AGI.
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Old 01-01-2014, 03:25 PM   #8
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Sure - because that is never recognized as income.

Same with gifting appreciated securities to charity - it is never recognized as income, so it doesn't show up in your AGI.
I thought that gifting appreciated assets was an itemized deduction from income--taken after computation of AGI and only good if not taking the standard deduction. Is it possible to gift appreciated securities and instead not count it as income for computation of AGI?

I remember it was possible to do this with IRA transfers to charities, but I thought that ended 31 Dec 2013 (I'd like to find out it was extended to 2014, would be good news for my MIL).
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Old 01-01-2014, 05:24 PM   #9
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I thought that gifting appreciated assets was an itemized deduction from income--taken after computation of AGI and only good if not taking the standard deduction. Is it possible to gift appreciated securities and instead not count it as income for computation of AGI?

I remember it was possible to do this with IRA transfers to charities, but I thought that ended 31 Dec 2013 (I'd like to find out it was extended to 2014, would be good news for my MIL).
I think you are correct. It is possible Congress will reinstate it for 2014. That's what they did in January 2013 for the 2013 year.
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Old 01-02-2014, 03:54 PM   #10
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I do not think this would work as charities does not affect MAGI. I did come up with an idea on how to deal with the obamacare subsidy cliff.

Obamacare subsidy cliff thought experiment
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