ACA, MAGI and SPY(etf)

[UtahSkier]

File under what I learned today...

Those of us receiving the Obamacare subsidy, we need to manage our MAGI and not exceed the fiscal cliff.

For me, the cliff is around $64K and my target MAGI is 62K to give me some buffer for any kind of mistake.

In early December, I start filling out my taxes using HR Block and enter my data from quicken. I am filling out the various 1099 forms from my brokerage.

I am now entering my real 1099 Div information and have just learned that dividends paid on 1/31/18 are included in my 2017 1099 tax information.

It appears that the SPY etf is special and its dividend is recognized when the dividend is declared (12/15/2017) , not when it is paid like most other ETFs.

SPY - Dividend Recognition


https://ibkr.info/article/2060

 

[UtahSkier]

A follow up on another security. VWO, VGK and VPL.

These are international ETFs and pay quarterly dividends. I estimated my 2017 taxes by entering the dividends received into the tax program. My numbers were a bit off from my official 1099 statements.

The discrepancy is from the foreign taxes paid. My dividends received did not include nearly $700 in foreign taxes which are included in my taxable amount.

Between this discrepancy and the SPY discrepancy, I consumed nearly 1/2 of my fiscal cliff buffer.

 

[audreyh1]

A follow up on another security. VWO, VGK and VPL.

These are international ETFs and pay quarterly dividends. I estimated my 2017 taxes by entering the dividends received into the tax program. My numbers were a bit off from my official 1099 statements.

The discrepancy is from the foreign taxes paid. My dividends received did not include nearly $700 in foreign taxes which are included in my taxable amount.

Between this discrepancy and the SPY discrepancy, I consumed nearly 1/2 of my fiscal cliff buffer.

Whew! That was close!

On foreign taxes paid - yes, your dividend income increases by that amount, but you don’t see it until the next year since you didn’t actually receive that much income (you received the net).

I usually add my prior years foreign taxes paid to the estimated div distributions when I estimate at the end of the year.

 

[UtahSkier]

Its worse than close... I think I have everything entered. I am within $60 of the cliff with a $6000 penalty on the other side.

 

[bingybear]

I have pretty good estimates for mine. + I take an accounting in early December and track as all the distributions are declared in December. I make a roth conversion in late December to put my income where I want it.
I have SDY which kicks out dividends and LTCG, about 6k of LTCG last year. But I have a fair buffer of carry over losses.

I get good placement of my income, the the amount that is qualified is a bit harder to determine.

Funds like SDY are likely more difficult to predict LTCG distributions. But you can get the declaration and adjust if you have room to add with roth conversions.

I would not want to guess and hope I have enough of a window that the distributions won't run over.

 

[zinger1457]

Its worse than close... I think I have everything entered. I am within $60 of the cliff with a $6000 penalty on the other side.

I'm in the same boat, I ended up $72 from the cliff that would cost me close to $12K. I also thought I left a decent buffer but dividends and CG far exceeded what I estimated. I do have a ROTH re-characterization I can fall back on if needed but that won't be available for 2018 so will probably delay my ROTH conversion this year until the very end.