The MAGI used to determine IRA limits (e.g. the MAGI used to determine if you can deduct a Traditional IRA contribution or if you can contribute to a Roth) are addressed by Turbo Tax "Tax Tips"; but not the MAGI used for other purposes like Net Investment Income Tax. The MAGI for Net Investment Income Tax is quite different and is defined on the top of page 19 in IRS Form 8960 instructions. Also the MAGI on healthcare.gov web site is different. On healthcare.gov, the MAGI for the health care marketplace adds back in tax exempt interest; but for IRAs, apparently tax exempt interest doesn't need to be included, unless it is "excludable qualified savings bond interest from Form 8815." This is important to me as we have tax exempt interest from municipal bonds.
Other web sites, like Investopedia, add to the confusion. Investopedia's web site on MAGI says: "MAGI can be defined as your household’s adjusted gross income with any tax-exempt interest income and certain deductions added back." I think Investopedia is wrong (or misleading anyway) but I am concerned about this definition nonetheless. I plan to hold back a little on the amount to convert from a traditional IRA to a Roth, in case I am wrong about the tax exempt interest. I think it would be helpful if Turbo Tax tips could help explain the complexity. It is really not so simple though I suppose most people don't pay net investment income tax or have municipal bonds.
