Hi. For the last couple of years, I needed to use the conversion/recharacterization strategy in order to reach an income level that exceeded 138 percent of the federal poverty guideline in order to be eligible for ACA health insurance coverage, and not fall into the Medicaid coverage pool. I live in an expanded Medicaid coverage state, New Jersey.
The dividends, interest and capital gains that I receive from my investments in a calendar year do not reach 138 percent of the poverty guideline. Dividends, interest and capital gains (almost all from mutual funds) are my only forms of income. So I would convert money from a pretax account to a post tax account in order to create a taxable event big enough to get me over the 138 percent hurdle. I would later, in the next calendar year, recharacterize the converted amount back down to a level just above the 138 percent threshold.
I understand that recharacterizations are being eliminated due to tax reform. I also understand that there is an outstanding unresolved issue as to whether a recharacterization can still be executed on a conversion that took place in 2017. While this is an important subject, it is not the issue of my concern here.
Aside from getting a JOB (yuck), are there any other other strategies or techniques that you can think of that would help me to achieve the goal of earning at least 138 percent of the federal poverty guideline as income, since my interest, dividends and capital gains do not get me to the 138 percent threshold?
Just as a point of reference, my capital gains and dividend totals for 2015 and 2016 were-
2016
Dividends 8261
Cap gains 4731
12992
2015
Dividends 12476
Cap gains 7438
19916
I am only 47, I have a small pension that would be considered taxable income (I believe) for federal tax purposes, but I am not eligible to receive that pension until I turn 60 and who knows what will happen between now and then? So this pension money wont get me over the 138 percent hurdle.
My financial and physical health thanks you for your insight.
The dividends, interest and capital gains that I receive from my investments in a calendar year do not reach 138 percent of the poverty guideline. Dividends, interest and capital gains (almost all from mutual funds) are my only forms of income. So I would convert money from a pretax account to a post tax account in order to create a taxable event big enough to get me over the 138 percent hurdle. I would later, in the next calendar year, recharacterize the converted amount back down to a level just above the 138 percent threshold.
I understand that recharacterizations are being eliminated due to tax reform. I also understand that there is an outstanding unresolved issue as to whether a recharacterization can still be executed on a conversion that took place in 2017. While this is an important subject, it is not the issue of my concern here.
Aside from getting a JOB (yuck), are there any other other strategies or techniques that you can think of that would help me to achieve the goal of earning at least 138 percent of the federal poverty guideline as income, since my interest, dividends and capital gains do not get me to the 138 percent threshold?
Just as a point of reference, my capital gains and dividend totals for 2015 and 2016 were-
2016
Dividends 8261
Cap gains 4731
12992
2015
Dividends 12476
Cap gains 7438
19916
I am only 47, I have a small pension that would be considered taxable income (I believe) for federal tax purposes, but I am not eligible to receive that pension until I turn 60 and who knows what will happen between now and then? So this pension money wont get me over the 138 percent hurdle.
My financial and physical health thanks you for your insight.