MAGI and non-taxed portion of Social Security
There seems to be conflicting information on the calculation of MAGI. For Roth conversion purposes and to keep MAGI below the next higher IRMA “bracket” is the non-taxed part of SS added back to AGI in addition to the other items?
Permalink Submitted by Alan - IRA critic on Thu, 2018-11-29 22:33
No, the non taxed portion of SS benefits is not added back. Just the taxable portion is included.
Permalink Submitted by Patrick Viglotti on Fri, 2018-11-30 03:06
Is the non-taxed part of SS ever added back to AGI? See the belowHow to Calculate Your Modified Adjusted Gross Income Once you have adjusted gross income, you “modify” it to calculate your MAGI. For most people, MAGI is the same as AGI.Specifically, Internal Revenue Code ((d)(2)(B)) states that MAGI is AGI increased by:· Any amount excluded from gross income in section 911 (Foreign earned income and housing costs for qualified individuals)· Any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax· Any amount equal to the portion of the taxpayer’s social security benefits (as defined in Section 86 (d)) which is not included in gross income under section 86 for the taxable year. (Any amount received by the taxpayer by reason of entitlement to a monthly benefit under title II of the Social Security Act, or a tier 1 railroad retirement benefit.)
Permalink Submitted by David Mertz on Fri, 2018-11-30 03:25
There are many different modifications to AGI, each for a different purpose. Section 36B(d)(2)(B) describes the modification to AGI for the purpose of determining Premium Tax Credits, not for IRMAA purposes. For IRMAA purposes, the relevant modification is described in Title 42 Section 1395r(i)(4), not in the Internal Revenue Code: https://www.law.cornell.edu/uscode/text/42/1395r#i_4