Author Topic: Investment Advice for Newly Married Couple  (Read 1874 times)

robotclaws

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Investment Advice for Newly Married Couple
« on: September 25, 2014, 01:33:58 PM »
I have a question related to taxes and investments.  For the first eight months of 2014, my wife was not working.  When she began working at the end of August, she signed up for health insurance provided by her employer.  For the previous six months, we had had our insurance through the Affordable Care Act.  Our premiums were greatly reduced thanks to tax credits and my mediocre salary.  Now that my wife has started working, our household income for 2014 will be greater than expected and our tax burden will be higher to pay back the health care credits.  I'm estimating that we will have to pay back around $2000 in health care tax credits.  I've read that the Modified Adjusted Gross Income is the number that the IRS uses to figure the amount of credits that we will have to pay back.  Would saving money in a Roth IRA (or anywhere for that matter, I'm just getting my feet wet with investments) lower my modified adjusted gross income?  Thanks for any help!

seattlecyclone

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Re: Investment Advice for Newly Married Couple
« Reply #1 on: September 25, 2014, 01:39:52 PM »
According to this link, there are only a few things added back to your AGI to compute your MAGI for the purpose of calculating your ACA subsidies. A Roth IRA wouldn't do it, since that is funded with post-tax money. Looks like deductible contributions to a traditional IRA would help, as would contributions to a traditional 401(k) or 403(b) if you have one of those available through your job.

robotclaws

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Re: Investment Advice for Newly Married Couple
« Reply #2 on: September 25, 2014, 01:51:14 PM »
I appreciate the response.  I have a 403b available that I make regular contributions to.  So maybe to avoid having to pay the extra tax burden, we could increase contributions to the 403b for the remainder of the year?  Do you happen to know if there is a cap on the amount of pre-tax money that can be contributed to that type of account?  I'll keep searching for answers as well.  Thanks again.

seattlecyclone

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Re: Investment Advice for Newly Married Couple
« Reply #3 on: September 25, 2014, 02:07:03 PM »
Increasing your contributions for the rest of the year would reduce your MAGI and thus probably reduce the amount of premium subsidy you have to repay. There's an annual limit of $17.5k in contributions to all of your 401(k) and 403(b) accounts put together. Your wife can contribute another $17.5k if she has such a plan available through her employer.