Some important "trigger" income levels for 2023

[Gumby]

Quote:

Originally Posted by Koolau If I wanted to "push it" and this year take as much as possible (from my 401(k)) without paying premium IRMAA surcharge in 2024 (based on MAGI in THIS year - 2022), what would be a fairly safe "bet" for actual MAGI limit in 2022? IIRC 8% inflation would increase the number to around $209K. IF my math is correct, I'd still not push it that far. Maybe $205K?? Any thoughts on this? Heh, heh, I actually have a reason for asking. Any help appreciated.

I have always found The Finance Buff to be accurate in his predictions. He presents two different scenarios for 2022 income limits (for 2024 coverage) - one assuming 0% inflation between now and next August and one assuming 5% inflation between now and next August. In the first instance, the first IRMAA limit will be $204k for MFJ. In the second, it will be $208k. I would split the difference. https://thefinancebuff.com/medicare-...irmaa-brackets

[SecondCor521]

Quote:

Originally Posted by Koolau If I wanted to "push it" and this year take as much as possible (from my 401(k)) without paying premium IRMAA surcharge in 2024 (based on MAGI in THIS year - 2022), what would be a fairly safe "bet" for actual MAGI limit in 2022? IIRC 8% inflation would increase the number to around $209K. IF my math is correct, I'd still not push it that far. Maybe $205K?? Any thoughts on this? Heh, heh, I actually have a reason for asking. Any help appreciated.

When faced with a similar situation, someone here, I think @pb4uski, recommended thinking about the situation in the following way:

There is some benefit to getting as close to the threshold as possible. In this case, realizing income at a desirable tax bracket. This benefit is probably calculable in some fashion.

There is some drawback to going over the threshold. In this case, the next IRMAA surcharge. This cost is also calculable in some fashion.

When deciding how close to get, looking at the magnitude of these costs and benefits (and perhaps whether the limit is "cliffy", as IRMAA is) to help make the trade-off decision.

In my similar situation, I was also wanting to get as close as possible. I was looking at a FAFSA cliff, where going over was quite costly and painful. Going under just meant losing out some Roth conversions that I wanted to do, but realistically could be done over future years. Analyzing things in the above way made me realize that I was fine being somewhat under the cliff.

...

Another trick that could work in some circumstances is to plan to go over the limit slightly, and then trim one's AGI with either IRA or HSA contributions in the spring. This, of course, requires being IRA or HSA eligible, and not being too much over, and having available contribution space. This idea won't work in your situation because of the timing - you won't know the 2022->2024 IRMAA limits in the spring of 2023 either.

[Gumby]

A very practical approach.

[Koolau]

Quote:

Originally Posted by Gumby I have always found The Finance Buff to be accurate in his predictions. He presents two different scenarios for 2022 income limits (for 2024 coverage) - one assuming 0% inflation between now and next August and one assuming 5% inflation between now and next August. In the first instance, the first IRMAA limit will be $204k for MFJ. In the second, it will be $208k. I would split the difference. https://thefinancebuff.com/medicare-...irmaa-brackets

Many thanks. This is what I was hoping to find. Much aloha.

[Koolau]

Quote:

Originally Posted by SecondCor521 When faced with a similar situation, someone here, I think @pb4uski, recommended thinking about the situation in the following way: There is some benefit to getting as close to the threshold as possible. In this case, realizing income at a desirable tax bracket. This benefit is probably calculable in some fashion. There is some drawback to going over the threshold. In this case, the next IRMAA surcharge. This cost is also calculable in some fashion. When deciding how close to get, looking at the magnitude of these costs and benefits (and perhaps whether the limit is "cliffy", as IRMAA is) to help make the trade-off decision. In my similar situation, I was also wanting to get as close as possible. I was looking at a FAFSA cliff, where going over was quite costly and painful. Going under just meant losing out some Roth conversions that I wanted to do, but realistically could be done over future years. Analyzing things in the above way made me realize that I was fine being somewhat under the cliff. ... Another trick that could work in some circumstances is to plan to go over the limit slightly, and then trim one's AGI with either IRA or HSA contributions in the spring. This, of course, requires being IRA or HSA eligible, and not being too much over, and having available contribution space. This idea won't work in your situation because of the timing - you won't know the 2022->2024 IRMAA limits in the spring of 2023 either.

Thanks so much.

Don't you just hate the "cliffs" and "mine fields" of all the various tax, MC and other gummint rigamarole. Makes me very thankful for this site! Aloha

[Hermit]

Thanks for the info Gumby.


You might want to update the IRMAA income year for single filers from 2020 to 2021?

[Gumby]

Quote:

Originally Posted by Hermit Thanks for the info Gumby. You might want to update the IRMAA income year for single filers from 2020 to 2021?

Done. Thanks for catching that.

[Gumby]

I added info for minimum income to get an ACA subsidy. Note the Medicaid expansion was recently on the ballot in certain states and the map could change.

[Hyper]

Thank you for this! A big question,(and yet to research it) I have is can we contribute to our existing IRA to keep our AGI in the sweet spot. Our HC last year was about $300. BCBS raised the plan by $5k for 23'. There was only one other new unknown provider which we chose for 23'. We have to think BCBS deliberately raised our premiums because our income comes from investments

[SecondCor521]

Quote:

Originally Posted by Hyper Thank you for this! A big question,(and yet to research it) I have is can we contribute to our existing IRA to keep our AGI in the sweet spot. Our HC last year was about $300. BCBS raised the plan by $5k for 23'. There was only one other new unknown provider which we chose for 23'. We have to think BCBS deliberately raised our premiums because our income comes from investments

If you are eligible to make a deductible traditional IRA contribution, that will reduce your AGI for ACA. Up to the contribution limits, of course.

How would BCBS know where your income came from?

[Gumby]

I have added the cutoff MAGI for the new electric vehicle tax credits. Thanks to RetMD21 for the suggestion.

[kgtest]

For anyone interested I created a thread documenting Important Contribution Limits for 2023 I will link here. Mods, feel free to move this post if its appropriate.

[jim584672]

2023 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA
1 $14,580
2 $19,720
3 $24,860
4 $30,000
5 $35,140
6 $40,280
7 $45,420
8 $50,560
For families/households with more than 8 persons, add $5,140 for each additional person.
https://aspe.hhs.gov/topics/poverty-...rty-guidelines

[Morgan22]

Thanks for letting us know. I've been wondering when they would be published so I can plan for 2024 ACA income thresh holds. (I like to plan years in advance. )

[aaronc879]

The minimum income for ACA subsidies this year is based on 2022 FPL, correct?
That's the number that matters to me.

[Dtail]

Quote:

Originally Posted by aaronc879 The minimum income for ACA subsidies this year is based on 2022 FPL, correct? That's the number that matters to me.

Yes

[gayl]

Moved

[USGrant1962]

I noticed that the Additional Medicare Tax threshold of $250K (MFJ) is missing. Basically 0.9% of wages + SE income over $250K. So that level gets the double-whammy of NIIT and Additional Medicare Tax (guess you can't call it AMT because that one is already taken).