Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-19-2021, 07:52 PM   #21
Thinks s/he gets paid by the post
 
Join Date: Sep 2014
Location: The Great Wide Open
Posts: 2,774
We're screwed. No ACA, No IRMAA limits, just take it as it comes. Be humble and say prayers for your blessings. All could be gone in a matter of moments. People plan, as we do, and the dear Lord scoffs. God helps those who help themselves, treat others as you want to be treated, enjoy life as you can. Life is too short to drink bad wine.
__________________
Give me Liberty or give me Death. Patrick Henry
Winemaker is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-20-2021, 09:08 AM   #22
Thinks s/he gets paid by the post
 
Join Date: Jun 2017
Location: Western NC
Posts: 2,725
Quote:
Originally Posted by wallygator69 View Post
We have an investment condo we want to dump but have $60k in deprecitiation we need to add to our Magi if we sell and lose ACA. If someone tells me we can dump it and keep our Obama care I will kiss them and buy them dinner after I talk to my Accountant...


Thx


Wally
1031 exchange?

The 5 Best 1031 Exchange Companies for 2020
ncbill is online now   Reply With Quote
Old 07-20-2021, 09:35 AM   #23
Dryer sheet aficionado
 
Join Date: Feb 2021
Location: ST GEORGE
Posts: 38
Some of this stuff takes a day or two to sink in. The American Rescue Plan has a provision that limits ACA premium payments to 8.5% of income for the Benchmark Plan.

I read the KFF link and found this CMS description as well.

To deliberately over-simplify a scenario, I believe this means I could generate $80K in LTCG and also take $20K out of my IRA for a MAGI of $100K and only owe a maximum of $8,500 on the PTC reimbursements.

Is this in the ballpark of a correct interpretation?

Best regards,
Chris
BubbaChris is offline   Reply With Quote
Old 07-20-2021, 09:43 AM   #24
Thinks s/he gets paid by the post
GTFan's Avatar
 
Join Date: Apr 2013
Location: Atlanta
Posts: 1,095
Quote:
Originally Posted by Winemaker View Post
We're screwed. No ACA, No IRMAA limits, just take it as it comes.
Not following this at all, especially for 2021-22. Everyone can get ACA and get subsidies subject to the 8.5% scale, and if your income is so high you pay everything OOP then there's no issue IMO. Was this a joke?
GTFan is offline   Reply With Quote
Old 07-20-2021, 09:52 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 5,960
Quote:
Originally Posted by BubbaChris View Post
In going through other MAGI threads, I noted a few times where forum members bit the bullet and maximized what they could in un-subsidized years. Our PTCs are just over $26K for the year, so I would want to be really sure before passing up on them for a year. Here's the reply my insurance agent provided when I asked about my ranges for 2021: "For a family of two if you make between $25,859 and $34,479 then you can be asked to pay back up to $650. From $34,379 to $51,719 up to $1,600 payback. From $51,719 to $68,959 up to $2,700 payback. Above $68,959 can ask you to pay it all back."
You probably came upon my story about going over the cliff a few years until I finally got tired of forgoing an ACA subsidy whose value had grown a lot in those 3 years (2017-2019). At the end of 2019, I finally bit the bullet and sold off an actively managed stock fund I had owned since 1996 (and it had built up a large LTCG). I had to pay about $10k in added income taxes, but it didn't cost me any ACA subsidy because I was already going over the cliff anyway. It did, however, get me back on the subsidy train in 2020. I figured out I will recover the added taxes by the end of this year in the form of a growing subsidy. The recent law change which eliminated the cliff got me a little more in subsidy, but it was simply getting the subsidy again in 2020 which was far more valuable.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 07-20-2021, 10:02 AM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 5,590
Quote:
Originally Posted by BubbaChris View Post
To deliberately over-simplify a scenario, I believe this means I could generate $80K in LTCG and also take $20K out of my IRA for a MAGI of $100K and only owe a maximum of $8,500 on the PTC reimbursements.

Is this in the ballpark of a correct interpretation?

Best regards,
Chris
Your use of the word "reimbursements" there is a bit confusing to me.

If your MAGI is $100K, then you would be expected to contribute the first $8,500 in premiums on your ACA policy. If your policy premium is more costly than that, then your PTC would cover the difference.

If you underestimated your income and received a higher APTC, you'd still be required to pay it back with your tax return.

Aside from premiums, you'd still possibly have deductibles, copays, and co-insurance of course.

The 400% FPL cliff is gone for 2021 and 2022, but returns in 2023 unless the law is changed further. So in 2023, if your MAGI is above 400% FPL and if the law remains the same, you'd have to repay all of your APTC.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 07-20-2021, 10:26 AM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 5,960
Quote:
Originally Posted by SecondCor521 View Post
Your use of the word "reimbursements" there is a bit confusing to me.

If your MAGI is $100K, then you would be expected to contribute the first $8,500 in premiums on your ACA policy. If your policy premium is more costly than that, then your PTC would cover the difference.

If you underestimated your income and received a higher APTC, you'd still be required to pay it back with your tax return.

Aside from premiums, you'd still possibly have deductibles, copays, and co-insurance of course.

The 400% FPL cliff is gone for 2021 and 2022, but returns in 2023 unless the law is changed further. So in 2023, if your MAGI is above 400% FPL and if the law remains the same, you'd have to repay all of your APTC.
In my tax form spreadsheet, I include the calculations shown in Form 8962, the one which determines the ACA subsidy. In that form, the SLCSP (Second Lowest Cost Silver Plan) plays a big role in determining my ACA subsidy. Unfortunately, despite my best efforts over the years, I have never really been able to figure out this number until I receive Form 1095-A in late January. Often, it is not close to even my best estimates of it.

It is not totally clear how the SLCSP will fit into whatever the revised Form 8962 will be with the (temporary) law change for 2021 and 2022. I suppose there will be a draft version in a few months but it is a minor PITA to hunt around in the IRS website for it.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 07-20-2021, 10:49 AM   #28
Dryer sheet aficionado
 
Join Date: Feb 2021
Location: ST GEORGE
Posts: 38
Quote:
Originally Posted by SecondCor521 View Post
Your use of the word "reimbursements" there is a bit confusing to me.

If your MAGI is $100K, then you would be expected to contribute the first $8,500 in premiums on your ACA policy. If your policy premium is more costly than that, then your PTC would cover the difference.

If you underestimated your income and received a higher APTC, you'd still be required to pay it back with your tax return.

Aside from premiums, you'd still possibly have deductibles, copays, and co-insurance of course.

The 400% FPL cliff is gone for 2021 and 2022, but returns in 2023 unless the law is changed further. So in 2023, if your MAGI is above 400% FPL and if the law remains the same, you'd have to repay all of your APTC.
Thanks for forgiving my use of reimbursements. 2020 was our first year in the ACA and I keep trying to learn both the process and terminology. For 2021 the PTCs we're applying to our premium will total over $24K.

So if my real risk for out-of-pocket premium payment this year and next is 8.5% of MAGI, then it is tempting to realize LTCGs while the rest of my federal income tax has the potential to be zero. It would give me more flexibility as I plan our withdrawals for the next handful of years.

I know in my OP I said I'm not into jumping through hoops. I don't stop to pick up random dimes anymore, but this feels more like there's a $20 bill sitting there.

Best regards,
Chris
BubbaChris is offline   Reply With Quote
Old 07-20-2021, 02:04 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 5,590
Quote:
Originally Posted by scrabbler1 View Post
In my tax form spreadsheet, I include the calculations shown in Form 8962, the one which determines the ACA subsidy. In that form, the SLCSP (Second Lowest Cost Silver Plan) plays a big role in determining my ACA subsidy. Unfortunately, despite my best efforts over the years, I have never really been able to figure out this number until I receive Form 1095-A in late January. Often, it is not close to even my best estimates of it.

It is not totally clear how the SLCSP will fit into whatever the revised Form 8962 will be with the (temporary) law change for 2021 and 2022. I suppose there will be a draft version in a few months but it is a minor PITA to hunt around in the IRS website for it.
What I do is when I go shopping for my ACA plan during open enrollment in the late fall (Nov/Dec), I take all the plans available in my zip code for my family size and ages and tobacco status. I then filter for only Silver plans. I then sort by premium low to high. I then look at the unsubsidized premium for the second plan on the list. That is the number that generally shows up on my 1095A in the SLCSP.

In theory, the number could change if the prices of the plans changed, or if an insurer entered or left the market in my state, or if my family composition or tobacco status changed, but in practice so far, the number has always been the same all 12 months and I think it matched the plan amount as described in the previous paragraph.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 07-20-2021, 02:07 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 5,590
Quote:
Originally Posted by BubbaChris View Post
Thanks for forgiving my use of reimbursements. 2020 was our first year in the ACA and I keep trying to learn both the process and terminology. For 2021 the PTCs we're applying to our premium will total over $24K.

So if my real risk for out-of-pocket premium payment this year and next is 8.5% of MAGI, then it is tempting to realize LTCGs while the rest of my federal income tax has the potential to be zero. It would give me more flexibility as I plan our withdrawals for the next handful of years.

I know in my OP I said I'm not into jumping through hoops. I don't stop to pick up random dimes anymore, but this feels more like there's a $20 bill sitting there.

Best regards,
Chris
I think you have it right. To be safe, if you're unsure and can wait on realizing those LTCGs, you could wait until Thanksgiving or so, buy a tax program, and put in all your numbers and make sure it works the way you think it does.

One thing to make sure of is your understanding of how ACA MAGI is calculated. It's AGI on your tax form plus a few other things - tax exempt interest and non-taxed SS are the biggies, but it also includes the AGI of any of your tax dependents who were required to file a tax return as well as excluded foreign interest.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 07-20-2021, 02:15 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 7,497
Quote:
Originally Posted by SecondCor521 View Post
One thing to make sure of is your understanding of how ACA MAGI is calculated. It's AGI on your tax form plus a few other things - tax exempt interest and non-taxed SS are the biggies, but it also includes the AGI of any of your tax dependents who were required to file a tax return as well as excluded foreign interest.
HSA contributions are also exempt from the ACA MAGI calculations, making it another another way to stretch the cliff limits.

Good point about the dependent income. We had one adult kid who always had a eclectic mix of jobs and school during the college years, and we never knew how much they would make in a given semester, so we took them off our taxes and put them on their own plan.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 07-20-2021, 02:19 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 5,590
Quote:
Originally Posted by daylatedollarshort View Post
HSA contributions are also exempt from the ACA MAGI calculations, making it another another way to stretch the cliff limits.

Good point about the dependent income. We had one adult kid who always had a eclectic mix of jobs and school during the college years, and we never knew how much they would make in a given semester, so we took them off our taxes and put them on their own plan.
To be a bit pedantic, HSA contributions are one of the several deductions which are subtracted from total income to get to AGI.

But your point about HSA helping with the cliff limits (and/or doing more Roth conversions) is good to point out.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 07-20-2021, 02:28 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 7,497
SecondCor521- Sorry, yes that was incorrect terminology on my part.

Complete list of ACA MAGI calculation factors here - https://laborcenter.berkeley.edu/pdf/2019/magi.pdf
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 07-20-2021, 02:51 PM   #34
Thinks s/he gets paid by the post
 
Join Date: Sep 2014
Location: The Great Wide Open
Posts: 2,774
Quote:
Originally Posted by GTFan View Post
Not following this at all, especially for 2021-22. Everyone can get ACA and get subsidies subject to the 8.5% scale, and if your income is so high you pay everything OOP then there's no issue IMO. Was this a joke?
No joke. I can't give anybody any advice on this subject, no experience. I've looked at this 1000 times over and sideways, so I've learned to live with our MAGI. I'm grateful things turned great for us at the present time, I always like to bend the rules legally so they can help us out, but they don't. No subsidies here.
__________________
Give me Liberty or give me Death. Patrick Henry
Winemaker is offline   Reply With Quote
Old 07-20-2021, 03:10 PM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 5,590
Quote:
Originally Posted by daylatedollarshort View Post
SecondCor521- Sorry, yes that was incorrect terminology on my part.

Complete list of ACA MAGI calculation factors here - https://laborcenter.berkeley.edu/pdf/2019/magi.pdf
No worries.

I'm about to start telling the neighbor kids to get off my lawn.

__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 07-20-2021, 03:30 PM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 5,960
Quote:
Originally Posted by SecondCor521 View Post
What I do is when I go shopping for my ACA plan during open enrollment in the late fall (Nov/Dec), I take all the plans available in my zip code for my family size and ages and tobacco status. I then filter for only Silver plans. I then sort by premium low to high. I then look at the unsubsidized premium for the second plan on the list. That is the number that generally shows up on my 1095A in the SLCSP.

In theory, the number could change if the prices of the plans changed, or if an insurer entered or left the market in my state, or if my family composition or tobacco status changed, but in practice so far, the number has always been the same all 12 months and I think it matched the plan amount as described in the previous paragraph.
I remember doing this the first few years and I was getting a number which was close to the SLCSP shown in the 1095-A form. It was off because my plan (and all plans in my state, by law) included coverage for something beyond the items required in a plan which adhered to ACA standards. I had no way of knowing how much of the premium I paid went toward the non-mandated item.

I would have been okay with that small difference, as long as it was close to the final SLCSP. But after a few years, the SLCSP I determined using your/mine method and what I saw in the 19095-A form were so much different it made our method useless, so I didn't bother trying to figure it out myself any more.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Want to live longer? Live at high altitude. zinger1457 Health and Early Retirement 40 11-05-2019 01:32 PM
There Are Learning Remote Controls ... and Then There Are Learning Remote Controls easysurfer Other topics 23 06-06-2019 11:48 AM
Question on the Maggie Valley area of NC......... FinanceDude Travel Information 3 06-14-2013 09:38 AM
Live long enough to live forever (book) JJac Health and Early Retirement 10 11-25-2006 08:41 PM
Hello, artist learning about ER. artsygal Hi, I am... 9 02-07-2004 04:02 AM

» Quick Links

 
All times are GMT -6. The time now is 07:41 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.