roth conversion MAGI coveredca
L1: roth conversion MAGI coveredcaI know that this question is not about a SEPP, but I am having trouble finding anyone else who even knows what all these words mean.
covered california uses a MAGI calculation of AGI (from line 37 of form 1040(2012). My current AGI falls below the lowest AGI thresehold and would place me into the medi-cal program instead. Without raising my AGI my only other option would be purchasing full priced coverage as I have always done.
My AGI was low on purpose since I never wanted to have to pay any more taxes than I had to , and it has several things locked into it (SEPP distribution, long term capital loss carryover, etc.) I have money in a regular brokerage account, but just spending cash from that account does nothing to line 37 of 1040 (2012). Buying and selling stocks, etc. might go to line 37 eventually but, are unpredictable. (In my case they would probably beoffset bythe the long term capital loss carryover anyways) Any change or deviation from the “best anticipated annual income” for 2014 is supposed to be “reported within 10 days of that event”
Per my accountant, a roth IRA conversion (in my case from a seperate non-SEPP rollover IRA) would add directly to line 37, for example convert $7,000.00 and it would add directly$7,000.00 to line 37. This would also work for me since my taxes are so low at this time.
My brokerage house tells me that as far as them facilitating the roth conversions go, I could convert any amount at anytime.
With the amount of money in the non-SEPP roll over IRA that I would be using to draw from, I couldcarry out these conversions for many years to come, and fine tune the exact dollar amount to convert so that I would exactly meet my “best anticippated yearly income”.
It seems to good to be true. I have trouble covincing customer service representatives at covered california that they even use MAGI (vs straight AGI), and if you speak to a manager they only know about half of the terms mentioned above. When I question them on exactly what is in thier (covered californias MAGI version) MAGI calculation they can only read to me the same EXAMPLES that I can view. No where is there a definative list, just examples of “some of the things” that are used.
Since covered california is really only the gatekeeper of administering the plan,it will ultimately be the IRS looking at my 2014 tax return sometime in April of 2015. It may not be as simple as covered california keeps telling me (“anything on line 37”) and the fact that covered california approved it, would be no excuse.
Im also pretty sure that in getting a loanfor something like a car or a house, no loan comany would ever count taxes generated from a roth conversion as income
It seems to me that this would be applicable to all of the affordable health care act, and not simply coveredca.2013-12-05 21:03, By: ihf, IP: [220.127.116.11]
L2: roth conversion MAGI coveredcaGo to www.irs.gov and search for MAGI which stands for “MODIFIED ADJUSTED GROSS INCOME”. It is the regular AGI on line 37 PLUS TAX-EXEMPT INTEREST, and maybe a couple of other items that do not apply to 99% of taxpayers. “MAGI” is used in a limited number of calculations, possibly phase-outs, etc. You could also check with a tax accountant, or at the library or book superstore in “J K LASSER YOUR INCOME TAX”.2013-12-06 01:07, By: dlzallestaxes, IP: [18.104.22.168]
L3: roth conversion MAGI coveredcadlzallestaxes
I can find nothing under irs magi rules that would exclude roth Ira conversions taxes from AGI on line 37 of 1040 (2012) from going straight into the calculated magi value used in magi income determinations.
does this mean that conversions can then be included as income in determining eligibility under coveredca and/or affordable health care act? (if you wanted to raise your magi).
are you advising your clients to consider roth-conversions amounts when esitimating “best anticipated anual income” amount used in determining coveredca/ ahordable health care coverages, which use magi?
2013-12-06 03:17, By: ihf, IP: [22.214.171.124]