Question.
I am trying to lower my MAGI for ACA subsidies or premium tax credit. I realize I am at the cliff of qualifying or not for one in 2018. I under estimated my income for 2017 and will owe a penalty bearing some intervention. My only retirement account is a Rollover IRA, which I add post tax dollars to. My employer does not offer a retirement account. I will make about 49K in 2018. I made 46k in 2017.
Do my contributions to my Rollover IRA with post tax dollars lower my MAGI? If so, can I add more before filling for 2017 taxes to lower it?
What are my options for 2018? Will any contributions in a retirement account help lower my MAGI to qualify for a premium tax credit?
Any advice or assistance would be helpful. Thanks!
Nondeductible IRA contributions do not lower your MAGI for ACA purposes, but deducting an IRA contribution will. Given that you are near the income level for qualifying for PTC, it seems likely that you IRA contribution would be deductible even if you were covered by a workplace retirement plan. It's not clear what you by " I add post tax dollars" to the IRA since taking a deduction for the contribution would effectively turn the contributed money into pre-tax dollars. If you are already deducting the IRA contribution there isn't much more you can do other than to increase the amount of your deductible contribution if you have not already contributed the maximum for your age.
You have until April 17, 2018 to make contributions for 2017. For any contribution for 2017 that you make in 2018, make sure that you specify to the custodian that the contribution is being made for 2017 otherwise the custodian will by default treat the contribution as a contribution for 2018.