MAGI

[Malum Prohibitum]

MAGI is what is used for ACA eligibility for subsidies.

Just so I am clear, IRA contributions are added to AGI to find MAGI, correct?  So, in getting my income down to qualify for subsidies, I can stick money in my 401(k) (and have my business put matching funds in it), but putting money in an IRA for me and my wife will not help, correct?

[DavidAnnArbor]

No I don't think that's correct. You're allowed to deduct IRA contribution to arrive at your MAGI.

http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf

[seattlecyclone]

"MAGI" is a term that means different things in different contexts. The key thing is that it's your Adjusted Gross Income (AGI) modified in certain ways. For the purpose of determining whether you can deduct an IRA contribution, that MAGI does not include the IRA contribution itself. For the purpose of determining your ACA subsidies, that MAGI does include the IRA deduction.

[Malum Prohibitum]

Thank you all.  I thought I read the opposite on the Turbo Tax web site, but it was not specifically in reference to the ACA.

Whew!  This will make things easier to "adjust."

[2Birds1Stone]

Yea, 401k, IRA, and HSA are awesome when it comes to lowering your MAGI.

Heck if a working couple both have access to these you could reduce your taxable income by $53,750 not counting employer matches!

[DavidAnnArbor]

And if you're self employed, then your Solo 401k can go even further for you in this regard.