Calculator for MAGI for ACA purposes

[simple girl]

Hello all!

I was going to create my own calculator for this purpose, as I would like an easy method for (1) estimating our MAGI for our first year of retirement and (2) tracking our actual MAGI as the year progresses.

However, I decided to first do a quick search to see what is already out there. I found this calculator:

https://www.nastad.org/sites/default/files/resources/docs/IL-Mock-MAGI-Worksheet-July-2013.pdf

Questions:

1) Does this calculator look valid to you for calculating MAGI for ACA purposes? Do you see any mistakes in it?

2) Has anyone found a calculator they like better online?

Thanks!

SG

 

[Free To Canoe]

Off the top of my head....
Why would you want to enter your SS# and DOB for a calculator?

I do not think that child support figures into MAGI or ACA MAGI.

 

[Dtail]

Off the top of my head....
Why would you want to enter your SS# and DOB for a calculator?

I do not think that child support figures into MAGI or ACA MAGI.

Related to the Child Support figure, I believe the form Simple Girl is using is adding the child support to the "Total Income" figure, but then deducting the figure as a "Spec Line B" adjustment.
Thus the net effect is it is not included. Not sure why it was grossed up, then taken out, as the MAGI calculation starts with Line 37 of Form 1040, which does not include child support, then it has various other adjustments.

 

[simple girl]

Off the top of my head....
Why would you want to enter your SS# and DOB for a calculator?

I do not plan to enter that data.

This calculator looks like something used by the Illinois Dept of Health employees to help determine clients' eligibility for services based upon MAGI.

 

[zinger1457]

I find it easy to do it in a spreadsheet. I have a tax spreadsheet that I use to estimate my taxes for the year, I add a couple lines to track my MAGI along with the ACA income limits for that year. Just need to understand the differences between MAGI and AGI and make the necessary changes to the spreadsheet, for most including myself there is no difference.

 

[tb001]

You might search on the mr money moustache forum. At some point I found a google doc to download with tons of basic calculators, including one for taxes.

 

[pb4uski]

Print this and pencil in your numbers.

http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf

All you really need is an estimate of your tax return numbers for the period in question and then adjust for the 3 addbacks.

 

[VanWinkle]

Off the top of my head....
Why would you want to enter your SS# and DOB for a calculator?

I do not think that child support figures into MAGI or ACA MAGI.

Only in Illinois would they ask for SS# and Birthdate on a calculator- what a crock!!

 

[MichaelB]

This calculator looks like something used by the Illinois Dept of Health employees to help determine clients' eligibility for services based upon MAGI.

That’s what it is - a worksheet used to determine eligibility amounts for a number of public assistance programs. DOB and SS are part of that process. For ACA MAGI calculation estimates I’d use the link in pb4uski’s post.

 

[gauss]

Print this and pencil in your numbers.

http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf

All you really need is an estimate of your tax return numbers for the period in question and then adjust for the 3 addbacks.

+1 Nice one-pager on MAGI for ACA/PTC (aka subsidy) purposes.

-gauss

 

[simple girl]

Thanks so much everyone! Will use the link from pb4uski!

 

[skibum]

A factor I almost overlooked is income from all household members who are required to file. For me this includes a college student who will be filing to obtain a refund for taxes withhold, although since he is not required to file, his income does not add into our family ACA MAGI.

A bit of a close call for me thinking I might gave overshot the ACA cliff with the added income, perhaps this will be of interest to someone.

 

[Rianne]

That’s what it is - a worksheet used to determine eligibility amounts for a number of public assistance programs. DOB and SS are part of that process. For ACA MAGI calculation estimates I’d use the link in pb4uski’s post.

Is the HSA deduction the full amount you contributed or just the portion you used that year?

 

[gauss]

Is the HSA deduction the full amount you contributed or just the portion you used that year?

It is the deductible portion of your HSA contribution (ie the number that shows up on 1040 pg 1 line 25.

The deductible portion is usually 100% of the contribution if you followed all the HSA rules correctly (ie maintained a HDHP for all 12 months, contributed less than or equal to the yearly maximum etc.)

HSA funds that you use to pay medical expenses are a separate thing that doesn't come into MAGI (unless the funds are not used to pay qualified medical expenses).

 

[Rianne]

It is the deductible portion of your HSA contribution (ie the number that shows up on 1040 pg 1 line 25.

The deductible portion is usually 100% of the contribution if you followed all the HSA rules correctly (ie maintained a HDHP for all 12 months, contributed less than or equal to the yearly maximum etc.)

HSA funds that you use to pay medical expenses are a separate thing that doesn't come into MAGI (unless the funds are not used to pay qualified medical expenses).

Thank you for that. I keep googling that question and I could not find specifically if the full contribution (following all the criteria) is deductible. So, we contributed $6000 and will maintain a HDHP for the full 12 months and will use the funds for qualified medical expenses. We get to take off $6000 from our AGI for 2018, right? This is the 1st year we've had an HSA.

 

[gauss]

I believe that your interpretation is correct.

If you had HDHP with family coverage for all 12 months in 2018 and you contributed 6000, which is less than the maximum for this scenario, to one of your HSAs in 2018 and there were no other contributions, then yes I believe the full 6000 is deducted on 1040 line 25.

Form IRS 8889 is the one that deals with HSA contributions and distributions and walks you though the deduction that will be entered on 1040 line 25.

The form and instructions for 8889 are available at this link.

IRS Publication 969 is an additional source for information on how HSAs work.


-gauss

 

[simple girl]

Thank you for that. I keep googling that question and I could not find specifically if the full contribution (following all the criteria) is deductible. So, we contributed $6000 and will maintain a HDHP for the full 12 months and will use the funds for qualified medical expenses. We get to take off $6000 from our AGI for 2018, right? This is the 1st year we've had an HSA.

We have deducted our full HSA contribution for the past several years. DH is still working and we have an HSA. We are not on an ACA plan yet.

However, if you are on the ACA and are receiving cost sharing subsidies, I read on another thread here that you may not be able to deduct the full amount of your HSA contribution.


If the cost-sharing subsidies would reduce the deductible to below the minimum for HSA-qualified plans, people generally won’t be able to contribute to an HSA in those circumstances, according to a Treasury Department spokesperson.

“For purposes of a health savings account, the cost-sharing reduction is considered in determining the deductible of the plan,” the spokesperson said.

Reference: https://khn.org/news/andrews-readers...r-from-others/

The minimum deductible for a family in 2018 is $2700. So, we may try to choose a plan that does not reduce our deductible lower than that (after cost sharing subsidies are applied), in order to have more flexibility with managing MAGI. We may have unpredictable income so the flexibility is important to us.

 

[Rianne]

We have deducted our full HSA contribution for the past several years. DH is still working and we have an HSA. We are not on an ACA plan yet.

However, if you are on the ACA and are receiving cost sharing subsidies, I read on another thread here that you may not be able to deduct the full amount of your HSA contribution.


If the cost-sharing subsidies would reduce the deductible to below the minimum for HSA-qualified plans, people generally won’t be able to contribute to an HSA in those circumstances, according to a Treasury Department spokesperson.

“For purposes of a health savings account, the cost-sharing reduction is considered in determining the deductible of the plan,” the spokesperson said.

Reference: https://khn.org/news/andrews-readers...r-from-others/

The minimum deductible for a family in 2018 is $2700. So, we may try to choose a plan that does not reduce our deductible lower than that (after cost sharing subsidies are applied), in order to have more flexibility with managing MAGI. We may have unpredictable income so the flexibility is important to us.

Ok, my deductible on the ACA is $6000 and DH is $6000, so as a family it is $12000. That's how we got the most affordable plan. We pay the full deductible before any co pays kick in.

 

[gauss]

Ok, my deductible on the ACA is $6000 and DH is $6000, so as a family it is $12000. That's how we got the most affordable plan. We pay the full deductible before any co pays kick in.

So did you have 2 separate self-only HDHP policies? This is not the same as a single family policy.

If this is the case then your $6000 in contributions would need to be made to two separate HSA accounts -- one owned by you and one owned by your spouse. There are no 'joint' HSA accounts.

The self-only contribution is limited in 2017 to $3,400 for each spouse -- assuming each spouse has a self-only HDHP.

Note, in general you would file two IRS form 8889s with your return -- one for you and one for your spouse.

-gauss

 

[Rianne]

Wait, I'm the primary ACA holder and my DH is on my policy. I understand the maximum contribution for us is $7900 (I think). So, we file jointly, married. The maximum AGI is for a married couple filing jointly is $61,000 for ACA. Do not want to go over that. Sorry, I mean MAGI is $61,000.

 

[RunningBum]

We have deducted our full HSA contribution for the past several years. DH is still working and we have an HSA. We are not on an ACA plan yet.

However, if you are on the ACA and are receiving cost sharing subsidies, I read on another thread here that you may not be able to deduct the full amount of your HSA contribution.


If the cost-sharing subsidies would reduce the deductible to below the minimum for HSA-qualified plans, people generally won’t be able to contribute to an HSA in those circumstances, according to a Treasury Department spokesperson.

“For purposes of a health savings account, the cost-sharing reduction is considered in determining the deductible of the plan,” the spokesperson said.

Reference: https://khn.org/news/andrews-readers...r-from-others/

The minimum deductible for a family in 2018 is $2700. So, we may try to choose a plan that does not reduce our deductible lower than that (after cost sharing subsidies are applied), in order to have more flexibility with managing MAGI. We may have unpredictable income so the flexibility is important to us.

You can only get cost-sharing subsidies on a silver plan, and I believe (though I could be wrong) that a silver plan deductible is not going to be high enough to qualify as an HSA plan.

 

[Rianne]

We have an HSA and are on a bronze high deductible plan.

 

[Sue J]

Here is another helpful way to understand the ACA MAGI calculation.

http://article.images.consumerrepor...O_Health_2013_1040_Edited_Annotated_10-14.pdf

 

[simple girl]

You can only get cost-sharing subsidies on a silver plan, and I believe (though I could be wrong) that a silver plan deductible is not going to be high enough to qualify as an HSA plan.

That indeed is quite possible. I recall when I was browsing for HSA eligible plans last year, I could not find any silver ones listed. I thought it was perhaps just what was available in my state...but maybe it is the deductible issue.

 

[Dtail]

I am fairly sure that there would not be any Silver Plans which would qualify to be an HSA plan, due in part to the high deductible needed.