POST UPDATED WITH NEW INFO:Alright, this is my virgin posting in MMM. I wish it could be more interesting, but maybe the challenge will make up for the lack of appeal :)
It has and will continue to be my goal to keep our Taxable Income below a certain threshold as we work towards FI, and to remain there, if not lower (comfortably of course) once we achieve FI (as the children will be on their own and no longer reliant upon our income for survival...hopefully lol)
So, I hadn't realized until a week ago that we are on track to exceed (at least it appears this way) the limitations to continue to receive aid from the state for our daughter's medicines (she has Cystic Fibrosis).
Let me first be clear that we pay for all family medical care and medicine through my employer insurance; however, our daughter's medicine is incredibly expensive (over $5k monthly) and the state assists by covering the monthly $1k deductible. Until we reach FI, it is extremely helpful to maintain this benefit. In fact, I'd like to make it count for as long as feasible to ensure we are FI enough for that unfortunate, but very likely, time when her medical expenses will be astronomical (double lung transplants are typical after 20).
The point at which the cliff is reached, tax-wise, is as follows: (UPDATED)The laws governing BCMH financial eligibility are changing next year:
http://www.healthtransformation.ohio.go ... &tabid=136
Financial Eligibility Criteria: The BCMH Treatment ProgramThey are swapping things to Medicaid, and cutting out loopholes that meant there was effectively no real income limit. Now I will have to be under 225% of FPL to continue the BCMH benefits for my daughter. I will qualify for nothing else and that's fine; BCMH is our only concern here.
According the the 2017 Ohio FPL chart, a family size of 4 would yield an
FPL of a monthly income of $4,612. (200% is $4100, so 225% would be $4612.50). According to their site,
this is based upon your MAGI. According to the numbers below, my AGI will be $74k this year. MAGI is calculated by adding back to the AGI my IRA deductions and student loan interest deductions.
That would yield a MAGI for this year of about the full $77k total income.Since IRA deductions are not applicable in reducing my MAGI, it seems that the TSP is the only way to lower my number.
The question is, by how much to achieve a monthly income of $4612 tops? I can't be correct when I calculate I need to stash over $21k in there, can I?
$4,612 multiplied by 12 months is $55,344.
With a MAGI of $77k, I'd have to cut $22k from MAGI by putting it into TSP...that's 5k a month for the remainder of the year...
I'm fairly certain that's not even feasible, did I do my math wrong here?
2016 Tax Income Return:
Total income: $66,180
AGI: $63,430
Total Deductions: $12,600
Total Exemptions: $16,200
Taxable income: $34,630
Total credits: $2,000
Tax payments: $3,421
Refund: $1,155
Forecasting according to 2017 changes and last pay-stub numbers (week 34 of 52 weeks, and calculating accordingly), the below should hold true:
2017 Tax Income Return (Mock per TurboTax):
Total income: $77,000
AGI: $74,000
Total Deductions: $21,226
Total Exemptions: $16,200
Taxable income: $39,574
Tax credits: $2,000
Tax payments: $3,421
Anticipated Refund: $412
Looking at these figures, what is your interpretation/advice/guidance?
ANOTHER UPDATE:
According to this MAGI calculator (
http://www.healthreformbeyondthebasics. ... -coverage/) IRA's are not counted towards the MAGI and therefore I would benefit from the ability to go up to April 2018 contributing towards them to fill the remainder of the $22k.
Another good change here is that this also shows my MAGI to actually mirror my AGI, so I would need $3k less of a change, meaning $19k is the newly reduced goal here...So, provided all this is what it is, it appears that leaves me with $19k as a goal, with the TSP and IRA's as my tools, with the IRA's extending doubling my time period to accomplish this.
Another approach to the approval issue (per another MMMer in a PM) is timing, as follows: Medicaid is based on the current month's income, unlike other programs that look at annual income.
We aren't due for her annual BCMH renewal application until April 2018. So, if this monthly perspective regarding Medicaid eligibility is correct, then that would mean I should be focusing on those '3 most recent pay stubs' they request copies of in the application. However, that leads me to wonder the purpose of their also wanting the prior years (2017) income tax return - surely those figures are being utilized as well.
If it were only those recent months, prior to renewal, that are being considered for eligibility....well, then I should focus our free cashflow on debt until then, and then ramp up my TSP allotment in February of 2018, no?
Gotta love this math and the tax vs government programs vs MAGI interpretations calculations...lol
Does this all sound about right (thinking/typing out loud here :))
Thanks you to everyone in advance!!