Bad years for stocks give you tax flexibility by realizing gains minus-ed out by varying losses. At least assuming the tax code isn't insane, such as form 8962 (health care premium credit) appears to be. Can anyone explain the rationale for being banned from taking that tax credit if you fall under the poverty line, but welcome to take it for being 1 to 4 times the line?!?
That seems an absurd pitfall if you realize losses to the extent of bringing you under the poverty line (combined with various complex deductions). The only exception seems to be if you expected to be poor and applied for advance premiums... forget that scenario. It seems unfair for even non-investors... do I gather they get other credits that compensate for those lost premium credits?
So say you are juggling losses with gains... and put aside that platitude about ignoring taxes with investments; there are many investments that become ripe for a slightly different etf deployment anyway over time. You apparently have to target your AGI with fussy precision to get relief on one of the most onerous payments of the year (my hyper expensive mandatory premiums for near worthless coverage has applied for 49% increase next year).
On Saturday, October 24, 2015 at 4:30:04 PM UTC-10, dumbstruck wrote:
No takers? Well how about general advice about realizing capital losses to reduce taxes, and pitfalls such as:
1) Going so low on the progressive tax curve that you aren't really saving much.
2) Failing to harvest aging cap gains which will otherwise occur at a year when you are much higher on progressive tax curve. Even more disastrously you may be in an unpopular fund that is later forceably liquidated, giving a tax bomb.
3) Missing out on a later snapback on your underwater investments as they return to normalcy.
The above typically make me harvest cap losses only to bleed down some large legacy cap gains, to smooth out future lumps of income. But this year I would like to aim lower for a health care credit, so could use advice about the pitfalls. I guess I don't have to worry about poverty line quirks because my preferred stocks are pumping so much dividends. I switched all my bonds to those because their price action has been so steady and positive the last few months. tks
On Saturday, October 24, 2015 at 9:30:04 PM UTC-5, dumbstruck wrote:
If you are below the poverty line, you are not eligible to enroll in a health insurance policy through the exchange, and therefore are not eligible for premium credits. You must enroll in Medicaid.
On 10/24/15 8:20 PM, dumbstruck wrote:
Can anyone explain the rationale for being banned from taking that tax
credit if you fall under the poverty line, but welcome to take it for
being 1 to 4 times the line?!?
Fall under the poverty line and you are Medicaid eligible. Even above
the line you can still be eligible. There is no asset test anymore.
On Monday, November 9, 2015 at 8:40:06 AM UTC-10, Alan wrote:
I saw further considerations in old Money article by Penelope Wang. In
order to maximize eligibility for HC premium credits, keep your income
low by 1) not taking Soc Security payments before you get on medicare,
and 2) cultivating a Roth IRA for lump emergency payments that might
otherwise require cashing out investments carrying high capital gain.
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