Confirming 2018 aca cliff before last adjustment to Roth conversion

[GreenER]

I just wanted to get reassurance on the max income for MFJ with no kids for 2018 ACA subsidy. When I was signing up for our 2018 coverage it seemed to be cutting us off from any subsidy at just over $64,000. But it appears that 400% of FPL is actually $65,840. I have room for another small Roth conversion but just wanted reassurance that $65,840 is the proper ceiling to use. I am not in AK or HI.

 

[jimbee]

You use the 2017 Federal Poverty Level to calculate savings for 2018. Check this reference: https://www.healthcare.gov/glossary/federal-poverty-level-fpl/

The 2017 FPLs are listed here: https://aspe.hhs.gov/2017-poverty-guidelines

 

[zinger1457]

I believe $64960 is the cutoff for two, the $65840 number would apply for your 2019 subsidy. Have you checked with your investment company to make sure you still have time to do another conversion in 2018. When I checked with Schwab they told me 14 Dec was the last date they would guarantee it would go through and count for 2018 though they would do their best to push it through if the request was received after that date. Not sure I would cut it too close to the ACA cutoff limit either, a miscalculation and going just $1 over could cost you $1000's in lost subsidy.

 

[GreenER]

You use the 2017 Federal Poverty Level to calculate savings for 2018. Check this reference: https://www.healthcare.gov/glossary/federal-poverty-level-fpl/

The 2017 FPLs are listed here: https://aspe.hhs.gov/2017-poverty-guidelines

Thanks, that's helpful.!

 

[GreenER]

I believe $64960 is the cutoff for two, the $65840 number would apply for your 2019 subsidy. Have you checked with your investment company to make sure you still have time to do another conversion in 2018. When I checked with Schwab they told me 14 Dec was the last date they would guarantee it would go through and count for 2018 though they would do their best to push it through if the request was received after that date. Not sure I would cut it too close to the ACA cutoff limit either, a miscalculation and going just $1 over could cost you $1000's in lost subsidy.

Both the IRA and Roth are at Vanguard. I waited until now as I had dividends that didn't post until today. When I did Roth conversions in the past it seemed to be instantaneous. Does anyone have experience with Vanguard in this regard? I missed doing this in time today due to hesitation, so I'd be doing it on 12/26 at this point. It's only another $5000 at best in any case. Thanks for the input!

 

[Cat-tirement]

Both the IRA and Roth are at Vanguard. I waited until now as I had dividends that didn't post until today. When I did Roth conversions in the past it seemed to be instantaneous. Does anyone have experience with Vanguard in this regard? I missed doing this in time today due to hesitation, so I'd be doing it on 12/26 at this point. It's only another $5000 at best in any case. Thanks for the input!

I just did a conversion at Vanguard late last week and got confirmation the next day.

 

[fh2000]

I just wanted to get reassurance on the max income for MFJ with no kids for 2018 ACA subsidy. When I was signing up for our 2018 coverage it seemed to be cutting us off from any subsidy at just over $64,000. But it appears that 400% of FPL is actually $65,840. I have room for another small Roth conversion but just wanted reassurance that $65,840 is the proper ceiling to use. I am not in AK or HI.

According to Covered California, 400% of FPL for family of 2 is $65,840.

 

[SecondCor521]

I like this link:

https://thefinancebuff.com/federal-poverty-levels-for-obamacare.html

When I read it, I think the applicable number for OP is $64,960.

 

[GreenER]

Can I use $3000 of capital loss to reduce our magic for ACA?

 

[GreenER]

Can I use $3000 of capital loss to reduce our magi for ACA?

 

[GreenER]

Can I use $3000 of capital loss to reduce our magic for ACA?

Magi that is!

 

[RunningBum]

Yes, a capital loss reduces MAGI.

 

[GreenER]

Yes, a capital loss reduces MAGI.

Thanks

 

[walkinwood]

Remember to account for any foreign taxes paid in mutual funds that invest overseas. That amount is not distributed, but is counted in your 1099DIV as a dividend. (You then get to take a credit/deduction). However, it could ruin your ACA calculations.

 

[RunningBum]

I'm chickening out on trying to squeeze the last penny out of my Roth conversion. Too many unknowns. Foreign taxes paid is a biggie. Another is dividends on my VG MM funds that won't be posted until 12/31 since I happen to have more cash than usual this month after doing some tax loss harvesting and waiting to reinvest after index funds dividends were paid. And just a little nervous about what else I might be missing from my estimates. So I'm stopping about $1500 short, so it's going to be a pretty small conversion. On the upside, anything I'm leaving on the table for conversions means a larger subsidy. Maybe I shouldn't be so obsessed with trying to get my whole tIRA converted before 70.

 

[GreenER]

I'm chickening out on trying to squeeze the last penny out of my Roth conversion. Too many unknowns. Foreign taxes paid is a biggie. Another is dividends on my VG MM funds that won't be posted until 12/31 since I happen to have more cash than usual this month after doing some tax loss harvesting and waiting to reinvest after index funds dividends were paid. And just a little nervous about what else I might be missing from my estimates. So I'm stopping about $1500 short, so it's going to be a pretty small conversion. On the upside, anything I'm leaving on the table for conversions means a larger subsidy. Maybe I shouldn't be so obsessed with trying to get my whole tIRA converted before 70.

I undershot by $1800 out of an abundance of caution. My Roth conversion done 12/26 is complete as of 12/27. I thought when I did my conversion with Vanguard last year that I was able to designate a dollar amount but this year it seemed I could only transfer a set number of shares. Since I was transferring MF shares that added another layer of uncertainty and wouldn't ya know it, there was a rally 12/26, so I transferred a slightly larger amount than intended! Glad I left plenty of wiggle room.

 

[pb4uski]

I'm glad that I don't have to fret about going off the ACA cliff ( no ACA subsidies for us)...I undershot by $28 because I rounded my final IRA withdrawal down to the nearest $100. Worst case for me if I go over is that some LTCG get taxed at 15%

 

[ikubak]

I'm chickening out on trying to squeeze the last penny out of my Roth conversion. Too many unknowns. Foreign taxes paid is a biggie. Another is dividends on my VG MM funds that won't be posted until 12/31 since I happen to have more cash than usual this month after doing some tax loss harvesting and waiting to reinvest after index funds dividends were paid. And just a little nervous about what else I might be missing from my estimates. So I'm stopping about $1500 short, so it's going to be a pretty small conversion. On the upside, anything I'm leaving on the table for conversions means a larger subsidy. Maybe I shouldn't be so obsessed with trying to get my whole tIRA converted before 70.

+1 I gave myself a $1500 cushion too. One dollar over could cost me more than $15K for my bronze plan.

Bronze worked good for us as we had few medical issues in 2018. Switched to low deductible silver for 2019 since DW will most likely need knee scoping and some other procedures.

 

[RunningBum]

Hope everyone did well with their fine tuning. If anyone went over, it'd be helpful if they share how it happened so others can learn from whatever mistake was made.

 

[gauss]

I believe $64960 is the cutoff for two, the $65840 number would apply for your 2019 subsidy. Have you checked with your investment company to make sure you still have time to do another conversion in 2018. When I checked with Schwab they told me 14 Dec was the last date they would guarantee it would go through and count for 2018 though they would do their best to push it through if the request was received after that date. Not sure I would cut it too close to the ACA cutoff limit either, a miscalculation and going just $1 over could cost you $1000's in lost subsidy.

+1
This is consistent with what my sources indicate.

-gauss

 

[SecondCor521]

Hope everyone did well with their fine tuning. If anyone went over, it'd be helpful if they share how it happened so others can learn from whatever mistake was made.

I was spot on this year for my own stuff.

Last year was the first year that I helped on a tax return for my Mom's trust. It has a Vanguard fund (VWIUX) that pays dividends monthly. The dividends are paid at the end of the month but credited to the account a day or two into the next month. Said dividends are also, for tax purposes, considered income in the year paid, not the year received. So I underestimated income by the amount of those dividends that were paid on 12/31/17 but received on 1/2/18. Not a big deal in the scheme of things, and I knew to account for that this year.