What do you spend on income taxes and health care combined?

[kgtest]

Fed: $15,500
State: $6,500
Medical: $6,000

We contributed to an HSA but I'm not sure that's included in "expenses" and therefore did not include it. We are still w*rking fam of 5 and I am self employed with some expenses to offset some income tax I otherwise would have been on the hook for.

Edit to add: Didn't include prescriptions and dr visit copays etc, but that is around another $1,000. $600 of that was for 2 new pairs of eyeglasses, regular and prescription sunglasses.

 

[WhenIsItTime]

Not for long, I just gotta get up the courage to post. Seems to me the low dollar should win though??

How far does the poll go into 6 figures?

I always think context is everything in many of these threads. Would also be good to know how much of the income was a discretionary decision (Roth conversion, trading gains, vs. other annually expected means) as some clarified.

 

[gooddog]

Almost zero for health. 20k for taxes. No Roth conversions, and we don't take $ out of investments.

 

[SecondCor521]

I haven't finalized my 2021 state taxes yet, because I'm lazy, but for 2021, including federal and state income taxes, dentist, doctor, insurance, and medicine, I should be less than $781 total.

I'm 52, single, and use ACA insurance. I went to the dentist twice for cleanings, and the doctor twice - once for my annual physical and once for a ganglion cyst in my hand which was fixed in an office visit. I paid for some OTC medicines, mostly for sinus issues which I have since a sinus surgery a few years ago.

Taxes-wise, as the father of two college sophomores, it behooves me to have a fairly low income; otherwise between FAFSA EFC increase and ACA subsidy decrease and federal and state marginal rates, it just doesn't make sense for me to do any more Roth conversions. As a result, I basically have a $0 federal income tax, and I get AOTC and PTC refunds every year so I have a negative effective tax rate.

I'll owe several hundred dollars to the state for state income taxes.

In 2022, my total might be negative. Because of the ARP Act, my insurance premiums will be about $1,964 less than they were in 2021. My current plan is to have a fairly similar tax plan. If my health expenses are the same then I'd be at -$1,183.

 

[calmloki]

Betwixt she and me we sent $129,471 to the states and feds - not counting property taxes or sales taxes. Somewhere around $6k for our shares of Medicare and then co-pays and some for tooth cleaning - Maybe $136k total for 2020? No stock market sales but did offload an old apartment building on contract. Sold another building on contract in May of 2021, so I expect our 2021 taxes will be similar or lower.

 

[PointBreeze]

Hi, I’m wondering how you do Roth conversions and get fully subsidized ACA?

 

[FlaGator]

Hi, I’m wondering how you do Roth conversions and get fully subsidized ACA?

Live off cash, ST bonds, CDs, etc. or other assets with a high taxable basis so liquidating them for living expenses results in low taxable income.

One of the important reasons to have plenty of liquid assets before hitting the silk

 

[swabby01]

Between Fed and state about 40% mid six figure. Medicare Maxed out IRMAA and about $6k for my supplemental. Me only. Wife still working but her medical is still under my company I retired from (great benefit) for a 90/10 plan for around $70/month. Will miss that once she hits Medicare age

 

[SecondCor521]

Hi, I’m wondering how you do Roth conversions and get fully subsidized ACA?

In my case, it's a combination of several things:

1. Having low cash flow requirements. Having a paid off house, a paid off car, no work expenses, and living in a low cost of living area all help. With low cash flow requirements, I can have low taxable income. With low taxable income comes a lot of tax benefits.

2. I have several sources of income that are not taxable. Gifts and credit card rewards and rebates are probably the biggest two in a typical year, although in 2021 this also included EIP3 and HEERF funds.

3. I'm generally speaking, living off that non-taxable income plus realizing capital gains from my taxable account. My basis is about half, so for every dollar of LTCG, I get about $2 in spendable dollars.

4. My Roth conversions are not very large at the moment.

5. I made an HSA contribution last year which essentially gave me another $3.6K of conversion room.

6. I claim either or both of my two children as dependents (depending on their facts and circumstances), which increases my family size and thus my FPL and thus my subsidies. But since they are in college, the majority of their expenses are covered by scholarships, some financial aid, and withdrawals from their 529s that I have been saving into since they were born.

7. The ARP Act increased ACA subsidy rates for 2021 and 2022.

8. Being retired and doing volunteer tax prep work gives me plenty of time and ammunition to optimize my tax situation. I actually didn't do a perfect job of it in 2021 for a number of reasons; in 2022 I should be able to do better.

I would do more Roth conversions, but again, because of the way the tax code is structured, I hit a 41.5% marginal tax rate in aggregate before my first dollar of income is taxed at the federal ordinary income tax. At age 75, I only project my aggregate marginal rate to be about 33.3%.

 

[Perryinva]

FIT $18k w/$32k Roth conversion, SIT $6k, HI $7.2k, RET $7k for two, 64 &69, pensions & one SS, all approx. HI much higher than when working, (miss that) but taxes, including FICA & Med are less than half (don’t miss that!) I expect those will be my numbers for a while until RMD age. Then who knows, since it is 8 years away.

 

[jdnd9091]

I'm curious how so people mention paying 12% for their Toth conversion, but someone else paid 22%. Is it based on the amount of conversion? I would like to convert my entire 401K to a Roth when I retire which will probably be over a million. Just curious.

 

[SecondCor521]

I'm curious how so people mention paying 12% for their Toth conversion, but someone else paid 22%. Is it based on the amount of conversion? I would like to convert my entire 401K to a Roth when I retire which will probably be over a million. Just curious.

Roth conversions are treated as ordinary income tax, so people paying 12% on their conversions are in the 12% bracket, and those paying 22% are in the 22% bracket. It basically is just a reflection that some people have (or choose to have) more taxable income than others for any number of reasons.

In 2021, I was in the 12% bracket based on my taxable income, but because of tax credits my actual federal income tax was $0, so I effectively had a 0% tax rate on my Roth conversions. In 2025 I tentatively plan to convert to the top of the 24% bracket, so I'll be taxed at 24% on my last Roth conversion dollars.

Depending on your overall circumstances, your $1M IRA may be a runaway, meaning it might be too large for you to convert as much as you want in the timeframe you want and still be beneficial to do so.

 

[FANOFJESUS]

Between Fed and state about 40% mid six figure. Medicare Maxed out IRMAA and about $6k for my supplemental. Me only. Wife still working but her medical is still under my company I retired from (great benefit) for a 90/10 plan for around $70/month. Will miss that once she hits Medicare age

500k?

 

[ElCheapo]

Income Tax $5,400

Health Insurance $16,200 (unsubsidized ACA premium for DW & I)

Curious, your Income Tax is low enough that it looks like your implied income level would qualify you for ACA subsidy. What am i missing?

 

[SecondCor521]

Curious, your Income Tax is low enough that it looks like your implied income level would qualify you for ACA subsidy. What am i missing?

Perhaps the difference between AGI and taxable income? Or preferenced vs. ordinary income? Or tax credits?

For MFJ in 2021 in the lower 48, 400% of FPL is $68,960. 2021 standard deduction is $25,100 for 2021 for MFJ. That implies a taxable income of $43,860. If that's all ordinary income, then the federal tax on that is $4,867, which is already below what they said they paid in income tax.

Could be they included some state income tax as well, but if they had preferenced income such as LTCG or qualified dividends, then their AGI might be even higher given their tax bill. And if they had tax credits, depending on how they chose to treat them, those would result in a lower tax bill relative to AGI.

 

[jj]

500k?

Quote:
Originally Posted by swabby01

Between Fed and state about 40% mid six figure. Medicare Maxed out IRMAA and about $6k for my supplemental. Me only. Wife still working but her medical is still under my company I retired from (great benefit) for a 90/10 plan for around $70/month. Will miss that once she hits Medicare age

500k?

$750k+ I should think for highest IRMAA level MFJ

 

[corn18]

Retire Mar 2021. Got a giant severance package. No Roth conversions or tax harvesting.



Income tax = $161k


Health care annual premiums:


Medical: $300 I am retired military and pay $25 / mo for Tricare

Dental: $360 This started as work coverage, then Cobra and now Benefeds

Vision: $240 same as dental


For 2022, I will have my pension, deferred comp and some more severance. All the extras end in 2024, so I'll use 2025:


Income Tax: $2500 Just my pension and the normal dividends. No Roth conversions but will tax gain harvest to the top of the 0% LTCG bracket. If I do Roth conversions, too, I will balance the tax gain harvesting with the Roth conversions to keep them in the 12%/15% bracket


Health Care premiums: The same. $900/year.