MAGI Calculation

[COZICAN]

As far as ACA is concerned is my MAGI before or after my standard exemption?

 

[MichaelB]

As far as ACA is concerned is my MAGI before or after my standard exemption?

Before. See this chart http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf

 

[COZICAN]

Before. See this chart http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf

Thanks. If you only knew how much time I've spent in the ACA website looking for that!

 

[footenote]

In case this applies to you, MAGI also includes a spouse's grossed-up SS (before Medicare premium is taken out).

It took us a surprising amount of effort to get that amount documented for ACA.

 

[wanaberetiree]

I think I know the answer, but want to double check you guys.
Say I have low income ~30K/year
And from my portfolio I am getting in CG etc ~120K
My MAGI will be 30K + 120K = 150K ?

Thx

 

[pb4uski]

Yes, capital gains are included in MAGI if that is what your question is.

 

[jpeter1093]

But NOT capital gains in an IRA, right?

 

[wanaberetiree]

But NOT capital gains in an IRA, right?

No, not from IRAs

 

[Carpediem]

No, not from IRAs

As long as they're reinvested, right?

 

[wanaberetiree]

As long as they're reinvested, right?

I currently reinvest in IRAs and withdraw from taxable accounts.

 

[RunningBum]

As long as they're reinvested, right?

It doesn't matter. An IRA is a black box, it doesn't matter what goes on inside there. Money only gets taxed when you take it out, and it's regular income then. There's really no concept of capital gains inside an IRA.

I guess if you mean "reinvested" within the IRA, as opposed to distributions being withdrawn from the IRA, I suppose, but again, those aren't capital gains, they are distributions that are taxed as regular income.

 

[CDRE]

Rental income is net expenses, correct? Example: rental income of $12K minus rental expenses of $2K equals $10k that is included in ACA MAGI?

 

[freedomatlast]

Rental income is net expenses, correct? Example: rental income of $12K minus rental expenses of $2K equals $10k that is included in ACA MAGI?

Correct. For rental income, use your bottom line from schedule E.

 

[pb4uski]

But NOT capital gains in an IRA, right?

Rental income is net expenses, correct? Example: rental income of $12K minus rental expenses of $2K equals $10k that is included in ACA MAGI?

All numbers are on the same basis as they are included in your tax return... so capital gains in an IRA don't count since if you sell an asset in an IRA at a gain it is not income on your tax return.... and rental income is net of expenses and depreciation since it is on your tax return.

 

[RunningBum]

If you fill out form 8962 to get the ACA tax credit, line 3 is your MAGI. I'm guessing if you have to use MAGI for some other tax purpose, it'll be on a form for that too. So if you're ever uncertain, use your favorite tax program, or look at your return from last year, to see exactly what it is.

 

[Willers]

If you fill out form 8962 to get the ACA tax credit, line 3 is your MAGI. I'm guessing if you have to use MAGI for some other tax purpose, it'll be on a form for that too. So if you're ever uncertain, use your favorite tax program, or look at your return from last year, to see exactly what it is.

Thanks. This is a really easy way of getting past year's numbers.