72t and Obamacare?

L1: 72t and Obamacare?EXISTINGSEPP Plan
Am I correct to assume that 72t payments are counted as MAGI for Obamacare?
Thanks!2013-11-05 17:49, By: steveh, IP: [68.55.35.135]

L2: 72t and Obamacare?You are correct. A 72t plan distribution is just like any other retirement plan distribution in this respect. The taxable portion is included in the ACA MAGI calculation.2013-11-05 20:28, By: Alan S, IP: [24.116.67.233]

L3: 72t and Obamacare?Thanks!2013-11-05 20:33, By: steveh, IP: [68.55.35.135]

L3: 72t and Obamacare?Alan… nice to see you posting again2013-11-05 20:34, By: Gfw, IP: [205.178.51.82]

L3: 72t and Obamacare?Alan S
Can you tell me if the 1099-r generated from a roth-ira conversion is counted in the ACA MAGI calculation also.
I am wary of this, as a SEPP distribution IS income, while a Roth conversion really is just taxes and no real income is generated at that time.
I do not see it excluded in the IRS MAGI rules, but my understanding is that there are differences in the ACA MAGI rules. Coveredca cannot define their total ACA MAGI rules, and only seems capable of citing one or two examples of “some” of the things that are excluded.
I have an appointment next week with my broker to setup the Roth conversion account with a $500.00 conversion (their minimum) so that I can get the 1-1-12 start date for the 5-year holding period for earnings. I was then going to do a Roth conversion in early 2014 to raise my ACA MAGI to the point where I would qualify for a health plan. If need be I was going to do another conversion close to the end of 2014 so that I could exactly match my “best anticipated annual income”. I have enough money in my non-SEPP rollover IRA to do this for several years. If I do not raise my ACA MAGI in this manner I would be on medi-cal.
The reassurances from covered-ca that “if it goes on line 37 of 1040 (2012) then it is counted, is not actually very assuring, when they are coming from someone who does not know what the word “ROTH” means.
I have been “pre-approved”, but not even to the point where they ask for the affidavit to testify to the differences between my 2012 tax return and the “best anticipated annual income” for 2014. I don’t want to have two conversions done, and then find outthat after they review the affidavit (it could take months to go through this income verification) that Roth IRA conversions do not count.
2013-12-06 18:35, By: ihf, IP: [66.81.47.231]

L4: 72t and Obamacare?I hope that was a typo, and that you meant establishing a 1/1/2013 start date,
not 2012 !!!
You are getting into some sophisticated planning, and I suggest you meet with a knowledgeable tax practitioner.
There are valid reasons to convert more than a “minimal” amount up to the 15% income tax bracket limit, but there are then considerations of taxable SS benefits and any effect on the new ACA healthcare premiums, etc. This has become a more complex area with all of the inter-related nuances.2013-12-06 19:41, By: dlzallestaxes, IP: [98.111.191.220]

L5: 72t and Obamacare?yes, I am sorry, I did mean 1-1-2013. The minimum is just the least that fidelity will do a conversion for
the reason for the minimum conversion in this year is soley to establish the start date for the 5 year exclusion of earnings. if I wait until 2014 to do the conversion I want for ACA MAGI reasons, then the start date would be 1-1-2014 for the start date of the 5 year exclusion for earnings. That is where the minimum conversion comes in. I don’t want any more taxable events in 2013.
I do want taxable events in 2014 that will boost my ACA MAGI to the level where covered-ca will issue a policy, if I can’t boost it I will be on medi-cal.
My accountant CAN tell me that a 2014 Roth-conversion will go to my AGI (none of the monies in there or anywhere else is post tax). He CAN NOT tell me if the conversion money will factored out in the ACA MAGI.
Coveredca CAN NOT tell me.
I can not believe that I am the only person in the United States that wants to know if the roth conversion will affect the ACA MAGI in a manner to qualify them or disqualify them to fall within the boundries of the afforadable health care act.
2013-12-06 22:12, By: ihf, IP: [66.81.45.80]

L6: 72t and Obamacare?Similarly, I cannot believe that you are so knowledgeable about so many things, but do not know how to search the internet. And you said that your accountant does not know how to find it either. I entered “ACA MAGI”, and one of the first entries was the following, and ironically it is from UC Berkeley !!!
In answer to your specific question, I see no reason why the ROTH CONVERSION would not count since it is basically an allowable IRA DISTRIBUTION that is permitted to be “reinvested” into a ROTH IRA without being subject to the 10% penalty for early distribution under age 59 1/2.

MAGI UNDER THE AFFORDABLE CARE ACT

Under the Affordable Care Act, eligibility for income-based Medicaid 1 and subsidized health insurance through the Exchanges will be calculated using a household’s Modified Adjusted Gross Income (MAGI). The Affordable Care Act definition of MAGI under the Internal Revenue Code2 and federal Medicaid regulations3 is shown below. For most individuals who will apply for health coverage under the Affordable Care Act, MAGI will be equal to Adjusted Gross Income. This document summarizes relevant federal regulations; it is not personalized tax or legal advice. Consult the Health Insurance Marketplace for your state, your local Medicaid agency, or a legal or tax advisor for assistance in determining your MAGI.Include:Û¢ Wages, salaries, tips, etc.Û¢ Taxable interestÛ¢ Taxable amount of pension, annuity or IRA distributions and Social Security benefits4Û¢ Business income, farm income, capital gain, other gains (or loss)Û¢ Unemployment compensationÛ¢ Ordinary dividendsÛ¢ Alimony receivedÛ¢ Rental real estate, royalties, partnerships, S corporations, trusts, etc. Û¢ Taxable refunds, credits, or offsets of state and local income taxesÛ¢ Other income Deduct:Û¢ Certain self-employed expenses5 Û¢ Student loan interest deduction Û¢ Educator expensesÛ¢ IRA deductionÛ¢ Moving expensesÛ¢ Penalty on early withdrawal of savingsÛ¢ Health savings account deductionÛ¢ Alimony paidÛ¢ Domestic production activities deductionÛ¢ Certain business expenses of reservists, performing artists, and fee-basis government officials+Note: Check the IRS website for detailed requirements for the income and deduction categories above. Do not include Veterans’ disability payments, workers’ compensation or child support received. Pre-tax contributions, such as those for child care, commuting, employer-sponsored health insurance, flexible spending accounts and retirement plans such as 401(k) and 403(b), are not included in AGI but are not listed above because they are already subtracted out of W-2 wages and salaries. Adjusted Gross Income (AGI) Line 4 on a Form 1040EZ Line 21 on a Form 1040A Line 37 on a Form 1040Add back certain income Û¢ Non-taxable Social Security benefits4 (Line 20a minus 20b on a Form 1040)Û¢ Tax-exempt interest (Line on 8b on a Form 1040)Û¢ Foreign earned income & housing expenses for Americans living abroad (calculated on a Form 2555)For Medicaid eligibility Exclude from incomeÛ¢ Scholarships, awards, or fellowship grants used for education purposes and not for living expensesÛ¢ Certain American Indian and Alaska Native income derived from distributions, payments, ownership interests, real property usage rights, and student financial assistanceÛ¢ An amount received as a lump sum is counted as income only in the month receivedModified Adjusted Gross Income under the Affordable Care ActNovember 2013Modified Adjusted Gross Income (MAGI) = 1 Medicaid eligibility is generally based on MAGI for parents and childless adults under age 65, children and pregnant women, but not for individuals eligible on the basis of being aged, blind, or disabled.2 Internal Revenue Code Section 36B(d)(2)(B)3 Public Health and Welfare Code Section 435.603(e)4 Social Security benefits۝ includes disability payments (SSDI), but does not include Supplemental Security Income (SSI), which should be excluded.5 Deductible part of self-employment tax; SEP, SIMPLE, and qualified plans; health insurance deductionCenter for Labor Research and Education, University of California, Berkeley Û¢ laborcenter.berkeley.edu2013-12-07 01:39, By: dlzallestaxes, IP: [98.111.191.220]

L7: 72t and Obamacare?I use a windows 98 computer with a dialup modem. I have to use the sitemap to navigate this site.
I do searches but I never know what will crash my computer, what will take an hour to load, and what will load for over an hour and then show up as blank. Sometimes in the middle of reading the text it dissappears and all navigation buttons disappear.
I did find the page you reference, but I do not know what all the terms mean. I can tell that the word roth is not mentioned, but I do not know if one of the terms mentioned includes roth IRA conversions.
when looking at the IRS MAGI they spoke about passive losses, it took me over 4 hours to get something that I could read before I could be sure ROTH IRAS conversions are not passive losses.
I have been at my desk over 14 hours today alone trying to find the information I need
Can’t you please please please just tell me if a roth IRA conversion is included in the umbrella of one of the terms mentioned above and therefore, yes or no,can I use it to boost my ACA MAGI in your opinion2013-12-07 02:55, By: ihf, IP: [66.81.47.144]

L8: 72t and Obamacare?I did tell you that in the short paragraph above the article.
In answer to your specific question, I see no reason why the ROTH CONVERSION would not count since it is basically an allowable IRA DISTRIBUTION that is permitted to be “reinvested” into a ROTH IRA without being subject to the 10% penalty for early distribution under age 59 1/2.
Passive losses are losses in business activities in which you are a “passive” or limited investors, and do not participate “actively”. In addition, for the most part, all “rental activities” are deemed to be “passive”, unless you are a “real estate professional”, which has very specific requirements.
Instead of spending 14 hours at your limited computer, I suggest going to a library to use theirs. Also, for under $ 20, buy J K LASSER YOUR INCOME TAX, and it will probably answer all of your questions. If there is an IRS office in your city, you can get publication 17, and any of the zillion other publications that cover the many specific topics.2013-12-07 05:47, By: dlzallestaxes, IP: [98.111.191.220]