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More MAGI madness -- good problem to have, I guess...
Old 12-19-2013, 11:48 AM   #1
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More MAGI madness -- good problem to have, I guess...

I may have some more MAGI planning ahead of me, even after I thought I had it figured out for 2014. If her congregation approves the new council recommendation next month, DW is set to get about a 30% bump in total compensation next year in her new contract. (Guess they must like what she's doing!) About half of that bump comes from their covering her with health insurance, but the other half may largely be cash compensation. Good for us, yeah, but I think we'll have to be diligent about putting a lot of that into an IRA and/or her 403B to keep us under the 300% cliff, which is critical in our situation -- a single dollar taking us over that threshold could cost us several thousand.

It's just interesting that we live in a new world where suddenly improved economic fortunes are immediately met with... uh-oh, now what do I have to do to stay on the right side of the ACA cliff? "ACA Cliff Management" may become a big time industry soon.....
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Old 12-19-2013, 12:10 PM   #2
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I may have some more MAGI planning ahead of me, even after I thought I had it figured out for 2014. If her congregation approves the new council recommendation next month, DW is set to get about a 30% bump in total compensation next year in her new contract. (Guess they must like what she's doing!) About half of that bump comes from their covering her with health insurance, but the other half may largely be cash compensation. Good for us, yeah, but I think we'll have to be diligent about putting a lot of that into an IRA and/or her 403B to keep us under the 300% cliff, which is critical in our situation -- a single dollar taking us over that threshold could cost us several thousand.

It's just interesting that we live in a new world where suddenly improved economic fortunes are immediately met with... uh-oh, now what do I have to do to stay on the right side of the ACA cliff? "ACA Cliff Management" may become a big time industry soon.....
Congratulations. It is a good thing, even if it isn't.
Your situation is unique, but checking to see if she can get an HSA will help defer those $$.
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Old 12-19-2013, 12:16 PM   #3
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Congratulations. It is a good thing, even if it isn't.
Your situation is unique, but checking to see if she can get an HSA will help defer those $$.
Nope, they are sponsoring her for a Gold level plan, not HSA-eligible. Maybe I'll ask them to cut back to Silver for 2015!
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 12-19-2013, 12:21 PM   #4
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Your situation is unique,.
Taken to a detailed level, literally everyone's situation is unique.

I still wonder what our leadership was thinking when they planned the ACA cliff to work the way it does.
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Old 12-19-2013, 12:21 PM   #5
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Congratulations. It is a good thing, even if it isn't.
+1

Ziggy29, I think your idea of putting it into a tax sheltered account like an IRA in order to lower your MAGI is excellent, if there is any way you can do that. Your MAGI would remain the same, but your IRA would provide a nice addition to your net worth.
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Old 12-19-2013, 12:22 PM   #6
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Ziggy29, I think your idea of putting it into an IRA is excellent if there is any way you can do that. Your MAGI would remain the same, but your IRA would provide a nice addition to your net worth.
Oh, we definitely can. If our income is low enough to stay under 300% of the FPL for ACA purposes, we can definitely deduct a TIRA contribution since it's earned income. And even if we couldn't, we could just increase the contributions to her 403B.
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Old 12-19-2013, 04:32 PM   #7
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You've already received excellent feedback on the $ problem and I'm sure you have it well in hand anyway, so I'll just add my congrats. Like you said, she must be doing very well!
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Old 12-19-2013, 04:35 PM   #8
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Oh, we definitely can. If our income is low enough to stay under 300% of the FPL for ACA purposes, we can definitely deduct a TIRA contribution since it's earned income. .
And she can also contribute to a spousal tIRA for you, right?
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Old 12-19-2013, 04:59 PM   #9
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And she can also contribute to a spousal tIRA for you, right?
She certainly can.

Congrats Ziggy, these problems are the nice problems life throws our way.

The UK created a cliff this year when they changed how the child benefit allowance works. There is no "Married Filing Jointly" in the UK, every one has to file as an individual, and child benefit used to be a universal benefit in that for every minor child the parent would receive a check each month.

Starting this year (2013) if one person in the household earns more than $80k then there is no payment made. That means income household could be $80,001 if there is one earner, and no child benefit payment, or each person could both earn $79,999 and receive full child benefit for each child.

Just saying that it is not only US leaders that come up with crazy stuff like this
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Old 12-19-2013, 05:18 PM   #10
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If she is eligible for a group plan* and they allow family members access to insurance you won't be eligible for a tax subsidy anyway.
'Family glitch' in health law could be painful
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Old 12-19-2013, 09:27 PM   #11
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If she is eligible for a group plan* and they allow family members access to insurance you won't be eligible for a tax subsidy anyway.
'Family glitch' in health law could be painful
Yeah, we saw that and we made it very clear that if they were going to cover my better half, it had to be done in a way that made it clear that I was not eligible to get covered. And in any event, I'm less concerned about a subsidy that I am in remaining below 300% of FPL, because my AI/AN status means I have no cost sharing below that threshold, subsidy or not. But I'm almost certain we structured things in a way that made it clear that I was not eligible to buy into her plan.

All that said, next year if all the glitches are fixed by then, we may be better off asking for $300-400 a month in extra pay, denying any health insurance benefits and having both of us use the Exchange for 2015. Even as a very part time postal employee I can get good dental and vision for us in 2015 as long as I want to keep that gig.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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