Boggedown wrote: ↑
Sun Jan 21, 2018 12:22 pm
My question is:
does this surprising RPM prediction (big immediate conversion) seem reasonable / comparable to what others have found and done?
Regarding a big, immediate conversion, consider the ObamaCare taxes that I don't believe are included in RPM (surprisingly these taxes were not repealed):
- The first tax is an incremental 0.9% Medicare tax on wages above $250,000 (married filing joint) and $200,000 (single). A married couple with $500,000 in wages in 2013 will owe an incremental $2,250 in taxes or simply $250,000 x.9%. This new tax is applied to gross wages and is before deductions for items like 401(k) contributions and healthcare premiums. It should be noted the tax also applies to self employment income earned by sole proprietors and partnerships as well.
- The second tax related to Obamacare is the "unearned income" tax. Married couples filing jointly with modified adjusted gross income (MAGI) above $250,000 are subject to this new tax. For single individuals this tax kicks in for MAGI above $200,000. So how does this second tax work? A married couple will pay the lower of 3.8% of:
1) excess MAGI above $250k or 2) unearned income.
For example, a married couple with a MAGI of $280,000 and unearned income of $15,000 would owe $570. The calculation works as follows:
Excess MAGI $30,000 x 3.8% = $1,140
Unearned income $15,000 x 3.8% = $250
reference:https://www.thestreet.com/story/1170996 ... rners.html
Also, for those on SS, consider IRMAA which is higher Medicare premiums for those with MAGI over $170,000.