Once we retire from our 9to5s we'll have to get health insurance through our state exchange. The amount of subsidy we'll qualify for is heavily influenced by our MAGI.
We plan on utilizing the Roth IRA rollover pipeline to annually transfer a portion of tax deferred retirement accounts to a Roth IRA, utilizing our MFJ deduction to minimize the taxes due every year, with the intention of cashing that money out of the Roth after the 5 year waiting period.
My question is how our Roth IRA conversions from a traditional IRA are going to affect our MAGI. Some places seem to suggest that the entire amount of the conversion is ordinary income, which contributes to your MAGI. Other places seem to suggest the exact opposite, that Roth conversions are one of the exceptions that you don't have to include.
Has anyone done this and can fill me in on your experience? Or does anyone here know more about tax law than I do and can clarify this question for me?
