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Modified Adjusted Gross Income (MAGI) (2) … means adjusted gross income – Line 8b of the 1040 Form * Health Care.Gov * 26 USC §62 *
The time frame is the future for what you tell Covered CA!
Sure, many people think it’s the past as Covered CA may ask for last years paperwork, but that’s BS! You might have to give back all the subsidies when you file Subsidy Reconciliation form #8962!
Official Publications on MAGI
It’s important to read the all material & links as one can’t rely on Covered CA to give you the correct answer.
UC Berkeley explains MAGI Modified Adjusted Gross Income –
Click on image to enlarge and for a more clear picture
Western Poverty & Law Explanation of MAGI – IMHO one of the most authoritative publications I’ve ever seen!
#Form8962 Premium Tax Credit
Reconciliation Form attaches to 1040
Subsidy is IMHO hocus pocus - smoke & mirrors
it all comes out when you file taxes!
Review the Foreign Earned Income Exclusion. If you live and work abroad, you may be able to claim the foreign earned income exclusion. If you qualify, you won’t pay tax on up to $100,800 of your wages.
Do you need USA coverage?
Do you qualify for an exemption?
Do you have a USA residence?
***However, it count’s towards Covered CA MAGI income, if you want subsidies!
IRS Website Explanation of
Foreign Earned Income Instructions for # 2555
Reporting Foreign Income:
Tax Tips from the IRS
Did you receive income from a foreign source? Are you a U.S. citizen or resident who worked abroad last year? If you answered ‘yes’ to either of those questions, here are eight tips to keep in mind about foreign income:
- Report Worldwide Income. By law, U.S. citizens and residents must report their worldwide income. This includes income from foreign trusts and foreign bank and securities accounts.
- File Required Tax Forms. You may need to file Schedule B, Interest and Ordinary Dividends, with your U.S. tax return. You may also need to file Form 8938, Statement of Specified Foreign Financial Assets. In some cases, you may need to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts. Visit IRS.gov for more information.
- Review the Foreign Earned Income Exclusion. If you live and work abroad, you may be able to claim the foreign earned income exclusion. If you qualify, you won’t pay tax on up to $100,800 of your wages
- ***However, it count’s towards Covered CA MAGI income, if you want subsidies!
- and other foreign earned income in 2015. See Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion, for more details.
- Don’t Overlook Credits and Deductions. You may be able to take a tax credit or a deduction for income taxes paid to a foreign country. These benefits can reduce your taxes if both countries tax the same income.
- Additional Child Tax Credit. You cannot claim the additional child tax credit if you file Form 2555, Foreign Earned Income, or 2555-EZ, Foreign Earned Income Exclusion.
- Use IRS Free File. Almost everyone can prepare and e-file their federal tax returns for free, using IRS Free File. If you make $62,000 or less, you can use brand-name tax software. If you earn more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. Some Free File software products and fillable forms also support foreign addresses. Free File is available only through IRS.gov.
- Tax Filing Extension is Available. If you live outside the U.S. and can’t file your tax return by the April 18 due date, you may qualify for an automatic two-month extension until June 15. This extension also applies to those serving in the U.S. military abroad. You will need to attach a statement to your tax return explaining why you qualify for the extension.
- Get IRS Tax Help. Check the international services site for the types of help the IRS provides, including how to contact your local office internationally. All IRS tax tools and products are available at IRS.gov.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.
Additional IRS Resources:
Steve talks about International Travel Insurance
Nonresident aliens are not taxed on certain kinds of interest income as follows, per Internal Revenue Code subsections 871(h) and (i), provided that such interest income arises from one of the following sources:
Interest on a bond that is used to finance government operations generally is not taxable if the bond is issued by a state, the District of Columbia, a U.S. possession, or any of their political subdivisions. Political subdivisions include:
- Port authorities,
- Toll road commissions,
- Utility services authorities,
- Community redevelopment agencies, and
- Qualified volunteer fire departments (for certain obligations issued after 1980).
Obligations that are not bonds. Interest on a state or local government obligation may be tax exempt even if the obligation is not a bond. For example, interest on a debt evidenced only by an ordinary written agreement of purchase and sale may be tax exempt. Also, interest paid by an insurer on default by the state or political subdivision may be tax exempt.
Indian tribal governments. Bonds issued after 1982 by an Indian tribal government are treated as issued by a state. Interest on these bonds is generally tax exempt if the bonds are part of an issue of which substantially all of the proceeds are to be used in the exercise of any essential government function. However, interest on private activity bonds (other than certain bonds for tribal manufacturing facilities) is taxable.
Original issue discount (OID) on tax-exempt state or local government bonds is treated as tax-exempt interest.
- Interest subject to penalty for early withdrawal.
- Money borrowed to invest in certificate of deposit.
- U.S. Savings Bonds
- Education Savings Bond Program
- U.S. Treasury Bills, Notes, and Bonds
- Bonds Sold Between Interest Dates
- State or Local Government Obligations
- Original Issue Discount (OID)
- When To Report Interest Income
- How To Report Interest Income
(i) A taxpayer’s modified adjusted gross income; (Line 37 NEW Line 7 1040) plus
(ii) The aggregate modified adjusted gross income of all other individuals who—
(A) Are included in the taxpayer’s family under paragraph (d) [below] of this section; and
(B) Are required to file a return of tax imposed by section 1 for the taxable year (determined without regard to the exception under section (1)(g)(7) to the requirement to file a return). [26 USC §6012 ♦ IRS tool to see if you must file a return ♦ Medi-Cal Household Size Flow Chart ♦ Blog – Insure Me Kevin.com]
(d) … A taxpayer’s family means the individuals for whom a taxpayer properly claims a deduction for a personal exemption under section 151 for the taxable year.
Family size [Medi-Cal Household Size Flow Chart ♦ Blog – Insure Me Kevin.com] means the number of individuals in the family. Family and family size may include individuals who are not subject to or are exempt from the penalty [mandate] under §5000 A (f) (1) for failing to maintain minimum essential coverage. Health Care.gov explanation *
(a) Allowance of deductions
In the case of an individual, the exemptions provided by this section shall be allowed as deductions in computing taxable income.
To be more clear — (2) Married taxpayers must file joint return. A taxpayer who is married (within the meaning of section 7703) at the close of the taxable year is an applicable taxpayer only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year. GPO.Gov Final Regulations Page 11 * Turbo Tax Calculator * Tax Policy Center….. Joint or separate? * Estranged Spouse?
View other pages & resources in this section…
Power Point presentation CMS Income Counting MAGI
Health Care.Gov – What income to count
See also this article on Kevin’s site
If you would like to talk to a professional tax adviser about this try Bruce Bialosky [email protected] 310.273.8250
#Report changes as they happen - within 30 days!
10 days for Medi Cal
- Our VIDEO on how to report changes to Covered CA
- Lost your job? How to keep your Health Insurance. Shelter at Home VIDEO
- References & Links
- Visit our webpage on how to report changes
- H & R Block
- Estimate the Subsidy for Health Insurance, benefits, premiums, etc.
- 8962 ONLINE Calculator
Child, Related Pages & Site Map
- Income Chart – Line 8b 1040 Covered CA MAGI
- Table of Contents – Details of Income, Deductions & Expenses for MAGI
- Alimony – From a Divorce Settlement
- Capital Gains & Dividends
- Clergy – Housing Allowance?
- Debt Cancellation? Foreclosure?
- Educational Credits – Student Loan Interest
- Gambling Income & Losses – Other Income Line 21