I am using government supported low income health insurance plan. I am planning to convert some money from traditional IRA to Roth IRA. Will I loss the low income qualification because the conversion counts as income? I am self-employed with myself only. I have about 10k income from graphic design, 10k income from a rental property, and 10k income from CD accounts interest. How much can I contribute to my Roth IRA? Will my passive income qualify for the income qualification?
So a traditional IRA to Roth IRA conversion results in the amount you convert being taxable in the year you convert it, and your adjusted gross income being higher as a result.
While I cannot specifically answer the question of qualification for health insurance for example Medicaid counts most types of income, including all the ones you have written in your question. These include: Wages from employment and self-employment; Social Security benefits, pensions, interest, dividends, alimony, disability payments; Expected interest and dividends from investments, including tax-exempt interest; net rental income; and unemployment compensation.
With $10K of self-employment income, (It would be net income.) you could make the maximum for 2024 of $7,000, or $8,000 if you are 50 or older by the end of the year.
Thank you for your question @hozung
All the best,
Marc T.
TurboTax Live Tax Expert
27 Years of Experience Helping Clients