Calculating for MAGI

[modhatter]

Michael posted a link earlier for what was included and not included in establishing your MAGI for ACA purposes. I can not find that link now (I thought I had it bookmarked) As I recall, it did not go into deductions so much in any detail. What I am wondering is, if you have a capital loss on your books of which you can deduct $3,000 per year against any capital gains or dividends or interest, will this $3,000 deduction be allowed in arriving at your MAGI for ACA purposes?

I did discuss it with my accountant, and he is not sure, as he says there are many MAGI calculations, and they differ, and he assumes the new ACA will have it's own. So, first I am asking Michael to provide that link again, and secondly, does anyone know whether the $3,000 capital loss can be utilized against the interest or dividend income?

 

[MichaelB]

The FAQ section is your friend http://www.early-retirement.org/forums/f47/faq-archive-on-ppaca-66345.html

I found this link to be most helpful http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

As for the capital loss, I'm no tax expert but IIRC your capital loss is first used to offset any capital gain, then up to $3K to offset other taxable income, including dividends.

 

[pb4uski]

For most people O-MAGI is tax return AGI + tax-free income (like muni bond income) + non-taxable SS. Your $3,000 tax loss utilized would be included in Obamacare MAGI since it is included in tax return AGI and there is no explicit adjustment to reverse it.

 

[modhatter]

Thank you. I thought it would remain the same, but was not sure. I knew they were counting tax-exempt income. I am also assuming they are not counting income in your Roth Ira.

 

[pb4uski]

Thank you. I thought it would remain the same, but was not sure. I knew they were counting tax-exempt income. I am also assuming they are not counting income in your Roth Ira.

Yes, income in your Roth is excluded since there isn't a specified adjustment to include it (like there is for muni interest)

 

[Sue J]

I found this yesterday and thought it was useful. Same info as stated here but in the format of an example of a Federal 1040.

http://www.consumerreports.org/health/resources/pdf/health-reform/1040_callouts.pdf

 

[pb4uski]

I like the format. Only thing that is missing would be exempt earned foreign income but that is rare - I'm a bit surprised they don't even mention it though.