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Friday, September 13, 2013

A Ray Of Hope For Affordable, Convenient, Quality Health Care

Pharmacy Rx symbol
There are few palatable prescriptions for the ailing health care industry, but telemedicine continues to provide some welcome relief. (Photo credit: Wikipedia)
Steven Brill’s recent 24,000-word cover story in Time captured, in demoralizing detail, all that’s wrong with America’s bloated, dysfunctional health care system. How about a ray of hope?
It’s called telemedicine. Say you have symptoms of a sinus infection or the flu, or even need a trip to the emergency room. Rather than wait days for a diagnosis from your primary doc, a telemedicine service can get a bona fide physician on the phone, by email, or on a video screen via Skype in 60 minutes or less—24 hours a day, seven days a week.
“Our health care system is broken in many ways, but telemedicine is a game-changer,” says Daniel McGugin, partner at Virtus Benefits, an employee benefits provider in Nashville, Tenn.
Good Medicine For Small Business
McGugin shared one case study involving a 150-person trucking company he’ll call “Abecee Transportation.” (Virtus won’t release real client names.) This month Abecee faced a 17% increase in its health insurance premiums. To ease the pain, the company considered switching to a plan with a higher deductible. That would have saved $150,000 a year in premiums; it also would have aggravated Abecee’s employees who would be forced to pay a bigger portion of their medical bills from their own pockets.
Enter telemedicine. In 2012 Abecee paid $120,000 in claims for “non-emergent” doctor visits (the sniffles and such), including expensive trips to the ER. According to a recent study by AmeriDoc—a leading telemedicine provider, along with Teledoc and Consult A Doctor—17,000 patients with access to a telemedicine plan reduced their number of visits to doctors’ offices by 30%, and to hospitals by 60%. At those same proportions, Abecee would save roughly $65,000 in claims. Cost of AmeriDoc’s telemedicine plan: $24,000.
As for Abecee’s employees, they’d get to keep their health benefits while not wasting productive hours schlepping to a doctor’s office or an ER. A 2010 report by Press Garney, a health care consultancy in South Bend, In., found that the average ER wait time is a little over 4 hours. AmeriDoc guarantees that doctors in its network respond within an hour.
Health premiums are only going higher and employers will continue to shift the burden to employees through high-deductible plans,” says McGugin. “We’re telling all of our clients to take a hard look at telemedicine.”
To be clear, telemedicine is no substitute for traditional insurance. Nor is it particularly cheap for individuals buying it in the open market. Individual telemedicine plans cost roughly $120 a year (including dependents), plus a $30 “consult fee” per call. (Employer-sponsored plans generally don’t charge a consult fee.)
If you’re a healthy male, have no preexisting medical conditions and are willing to take chances, you might want to pair telemedicine service with a super-high-deductible insurance plan that has a rock-bottom premium. That combo provides access to affordable treatment for non-emergencies while cushioning the financial blow of a catastrophic illness or accident. Other target customers include those who simply can’t afford traditional insurance but want access to basic care.
You can sign up for telemedicine service by calling a provider directly or working through a broker like McGugin. The cost is the same—providers pay the broker fee, not you.
Point Of No Return
While telemedicine isn’t new (hospitals have used phones to serve remote rural areas for 40 years), less than 1% of Americans have access to it. Expect more to join the ranks—and soon—thanks to affordable high-speed Internet connectivity and, of course, rocketing health costs.
The Society of Actuaries just released a study estimating that premiums on individual health plans will jump 32% over the next three years. Towers Watson, an HR consulting firm, found that 70% of companies with more than 1,000 employees will offer high-deductible plans ($1,250 minimum deductible) this year, up from 59% in 2011. And Rand Corp. estimates that, within a decade, half of all workers with employer-sponsored health care (including government employees) will have high-deductible plans.
All that bad news is good for David Lindsey, CEO of AmeriDoc. Founded just five years ago, the Dallas company has quietly amassed 1.3 million paying patients (not including dependents). That number is on track to triple by the end of the year, says Lindsey.
AmeriDoc’s network includes 290 doctors (some licensed in multiple states) who agree to be on call when they aren’t seeing patients on-site. Lindsey claims he has enough capacity to handle current members, though he looks to add more white coats all the time. “Doctors inquire every day about joining the network,” he says.  A big reason: more patients per hour with little additional overhead. “They hate dealing with insurance companies. [Telemedicine] is how they’re going to get paid in the future.”
To control quality (and avoid malpractice suits), AmeriDoc records all visits electronically and stores the data for seven years. Customer-service staffers review random samples of calls every week; they also call every patient within two days after a consultation. “We call three times,” says Lindsey. “If [the member] doesn’t respond, we assume all went well. We’ve never had a malpractice claim.”
Lindsey concedes that, thus far, a lot of subscribers use telemedicine to “shop for prescriptions” without having to visit a doctor. Viagra is a big request—one that AmeriDoc’s physicians routinely deny without the requisite heart-rate and blood-pressure tests.

Meanwhile, AmeriDoc’s remote-delivery menu of services is expanding. The company created a finger-prick blood-testing pack that lets patients take their own samples and mail them in sterilized packs to a lab to measure testosterone, cholesterol and glucose levels. Next month AmeriDoc will roll out another self-blood test that aims to detect future cardiovascular disease.
Bottom line on telemedicine, says Lindsey: “It would be irrational if you did not call it a ray of hope for American health care.”
Have thoughts on telemedicine? Please comment on this post. Have any other smart ideas for taming health care costs? Share those, too.

Sign up with Ameridoc now at  Call 888-753-2521 with any questions. 

Monday, July 22, 2013

Generational Wealth Part 1 of a series. How to obtain it and how to keep it.

This will be one in a series of post regarding the strategy for generational wealth.  There are multiple strategies for this result, some are riskier than others.  A true generational wealth plan in my strategy should have a spending period that offsets total tax liability, converts what you are spending to investments or a safe vehicle that can grow, give you access to this money after a seasoning period or at some point in the future without having a taxable event, provide cash flows that sustain wealthy lifestyle for your life cycle, provide cash flow for your offspring during their life cycle, and provide a lump sum payout to a third, fourth and fifth generation as well as a re-visitation of the cycle you initiated. Generational wealth is not a new concept. 

The need for capitalization is a standard among anyone starting a business or acquiring a business, or expanding an existing business.  Chances are; most business owners will retire from their business not as well off as they began and most have businesses that are not designed to operate if they are not working in the business.  Most small business models are designed with the owner as the central figure in the operation.  That is a scary thought because it is hard to wear all those hats and get truly wealthy.  You might have huge lump sums of cash or continual cash flow over the business life cycle, but so many people that have successfully generated cash flow do not have long term stability and find themselves without cash before retirement or having to come out of the retirement that was the result of the payoff.  This false since of security has set a lot of people up for monetary failure because of the financial instability and a self-destructive strategy.   

Most, if not all individual’s desire wealth, a wealthy retirement, and security of their current lifestyle as they age as well as security for those they leave behind.  So how do you go about attaining such a thing as security for yourself and off-spring?  Many people might perceive such a thing as financial security as an illusion.  Of course the major reason is because it has eluded so many and even when some have found security they have lost it.  Financial security for many is perceived as something that is attainable by individuals and corporations that are already wealthy, but not for themselves; not for their organizations.  Many have bought into vehicles that just don’t cut the muster, so to speak.  Many have been deceived for so long and have been taught so wrong that even if I showed them a way to generational wealth that can be used right now today and used by their family in the future, then they would not move forward with a since of urgency that the subject deserves.  Many would rather trick themselves into believing that they are safe when they are not.  The adage goes, “you can lead a horse to water, but you can’t make him drink”; to elaborate, “even if they are thirsty and about to die”. 

Most individuals have a financial blueprint that will self-destruct long before they figure out that they have been bamboozled.  Most financial plans associated with big corporations are setup to benefit the company more than the employees they pilfer for deposits into 401K’s, IRA’s, and Pensions.  Most of these vehicles have taxable when money is disbursed.  These vehicles have a low threshold for tax avoidance approximately $6,000 X 25% or $12,000 X 25% if married filing joint.  These vehicles defer taxes to future periods and that means that you will pay a higher tax rate, after all, taxes are increasing not decreasing.  Many who are invested in these vehicles need to go to the next step by investigating how to avoid a taxable event and move out of these vehicles.  I am pretty much a self-proclaimed expert in this area because I don’t know of many that are versed and as experienced as my organization is regarding the steps taken to disburse and move money out of these vehicles into other investments that provide a better hedge for your money and basically has the ability to put you in an arbitrage position by leveraging your cash.  Make sure you follow these series for more information on this subject as we provide information on the subjects of tax avoidance and reveal strategies that work.  Contact me at 888-753-2521 or email questions at .

Saturday, February 9, 2013

Deductions provide a windfall for taxpayers if they are taken!

One thing we know for sure is that the opportunity to make mistakes is almost unlimited, and missed deductions can be the most costly. About 45 million of us itemize on our 1040s -- claiming more than $1 trillion worth of deductions. That's right: $1,000,000,000,000, a number rarely spoken out loud until Congress started tying itself up in knots trying to deal with the budget deficit and national debt.

Another 92 million taxpayers claim about $700 billion worth using standard deductions -- and some of you who take the easy way out probably shortchange yourselves. (If you turned 65 in 2012, remember that you now deserve a bigger standard deduction than when you were younger.)

Yes, friends, tax time is a dangerous time. It's all too easy to miss a trick and pay too much. Years ago, the fellow who ran the IRS at the time told the public that he figured millions of taxpayers overpay their taxes every year by overlooking just one of the money-savers listed below.

State sales taxes
This is an especially dangerous issue for 2012 returns because, throughout 2012, this tax deduction simply didn't exist. The right for taxpayers to deduct state sales taxes paid expired at the end of 2011. Everyone expected Congress to revive the tax break sometime during 2012, but the issue got tangled up in fiscal cliff negotiations. Finally, in the bill approved January 1, 2013, the deduction was restored ... retroactively for 2012 and for 2013 returns that will be filed next year.

This is particularly important to you if you live in a state that does not impose a state income tax. You see, Congress offers you the choice between deducting state income taxes paid or state sales taxes paid. You choose whichever gives you the largest deduction, of course, and if your state doesn't have an income tax, the sales tax write-off is clearly the way to go.

In some cases, even filers who pay state income taxes can come out ahead with the sales tax choice.

The IRS has tables that show how much residents of various states can deduct, based on their income and state and local sales tax rates. But the tables aren't the last word. If you purchased a vehicle, boat or airplane, you may add the sales tax you paid on that big-ticket item to the amount shown in the IRS table for your state.

The same goes for any homebuilding materials you purchased. These add-on items are easy to overlook, but could make the sales-tax deduction a better deal even if you live in a state with an income tax. The IRS has a calculator on its Web site to help you figure the deduction. (As this is written, the IRS is working to update the calculator for 2012 returns.)

Reinvested dividends
This isn't really a tax deduction, but it is an important subtraction that can save you a bundle. And this is the break that former IRS commissioner told the public that a lot of taxpayers miss.

If, like most investors, your mutual fund dividends are automatically used to buy extra shares, remember that each reinvestment increases your tax basis in the fund. That, in turn, reduces the taxable capital gain (or increases the tax-saving loss) when you redeem shares. Forgetting to include the reinvested dividends in your basis results in double taxation of the dividends -- once when they were paid out and immediately reinvested in more shares and later when they're included in the proceeds of the sale. Don't make that costly mistake.

If you're not sure what your basis is, ask the fund for help. (Starting with sales in 2012, mutual funds must report to investors -- and the IRS -- the tax basis of shares redeemed during the year. But note this: The new rule applies only to shares purchased in 2012 and later years. If you redeemed shares you purchased prior to 2012, it's still up to you to figure your basis. Don't forget those reinvested dividends!)

Out-of-pocket charitable contributions
It's hard to overlook the big charitable gifts you made during the year, by check or payroll deduction (check your December pay stub).

But the little things add up, too, and you can write off out-of-pocket costs incurred while doing work for a charity. For example, ingredients for casseroles you prepare for a nonprofit organization's soup kitchen and stamps you buy for your school's fundraising mailing count as a charitable contribution. Keep your receipts and if your contribution totals more than $250, you'll need an acknowledgement from the charity documenting the support you provided. If you drove your car for charity in 2012, remember to deduct 14 cents per mile plus parking and tolls paid in your philanthropic journeys.

Student-loan interest paid by Mom and Dad
Generally, you can only deduct mortgage or student-loan interest if you are legally required to repay the debt. But if parents pay back a child's student loans, the IRS treats the money as if it was given to the child, who then paid the debt. So, a child who's not claimed as a dependent can qualify to deduct up to $2,500 of student-loan interest paid by Mom and Dad. And he or she doesn't have to itemize to use this money-saver. Mom and Dad can't claim the interest deduction even though they actually foot the bill since they are not liable for the debt.

Job-hunting costs
If you're among the millions of unemployed Americans who were looking for a job in 2012, we hope you kept track of your job-search expenses ... or can reconstruct them. If you're looking for a position in the same line of work, you can deduct job-hunting costs as miscellaneous expenses if you itemize. Qualifying expenses can be written off even if you didn't land a new job. In any case, such expenses can be deducted only to the extent that your total miscellaneous expenses exceed 2% of your adjusted gross income. Job-hunting expenses incurred while looking for your first job don't qualify. Deductible job-search costs include, but aren't limited to:
  • Transportation expenses incurred as part of the job search, including 55.5 cents a mile for driving your own car plus parking and tolls
  • Food and lodging expenses if your search takes you away from home overnight
  • Cab fares
  • Employment agency fees
  • Costs of printing resumes, business cards, postage, and advertising

The cost of moving for your first job
Although job-hunting expenses are not deductible when looking for your first job, moving expenses to get to that job are. And you get this write-off even if you don't itemize.

To qualify for the deduction, your first job must be at least 50 miles away from your old home. If you qualify, you can deduct the cost of getting yourself and your household goods to the new area. If you drove your own car on a 2012 move, deduct 23 cents a mile, plus what you paid for parking and tolls.

Military reservists' travel expenses
Members of the National Guard or military reserve may tap a deduction for travel expenses to drills or meetings. To qualify, you must travel more than 100 miles from home and be away from home overnight. If you qualify, you can deduct the cost of lodging and half the cost of your meals, plus an allowance for driving your own car to get to and from drills. For 2012 travel, the rate is 55.5 cents a mile, plus what you paid for parking fees and tolls.

Deduction of Medicare premiums for the self-employed
Folks who continue to run their own businesses after qualifying for Medicare can deduct the premiums they pay for Medicare Part B and Medicare Part D and the cost of supplemental Medicare (medigap) policies. This deduction is available whether or not you itemize and is not subject the 7.5% of AGI test that applies to itemized medical expenses. One caveat: You can't claim this deduction if you are eligible to be covered under an employer-subsidized health plan offered by your employer (if you have a job as well as your business) or your spouse's employer if he or she has a job that offers family medical coverage.

Child-care credit
A credit is so much better than a deduction; it reduces your tax bill dollar for dollar. So missing one is even more painful than missing a deduction that simply reduces the amount of income that's subject to tax. In the 25% bracket, each dollar of deductions is worth a quarter; each dollar of credits is worth a greenback.

You can qualify for a tax credit worth between 20% and 35% of what you pay for child care while you work. But if your boss offers a child care reimbursement account -- which allows you to pay for the child care with pre-tax dollars -- that might be an even better deal. If you qualify for a 20% credit but are in the 25% tax bracket, for example, the reimbursement plan is the way to go. (In any case, only amounts paid for the care of children under age 13 count.)

You can't double dip. Expenses paid through a plan can't also be used to generate the tax credit. But get this: Although only $5,000 in expenses can be paid through a tax-favored reimbursement account, up to $6,000 for the care of two or more children can qualify for the credit. So, if you run the maximum through a plan at work but spend even more for work-related child care, you can claim the credit on as much as $1,000 of additional expenses. That would cut your tax bill by at least $200.

Estate tax on income in respect of a decedent
This sounds complicated, but it can save you a lot of money if you inherited an IRA from someone whose estate was big enough to be subject to the federal estate tax.

Basically, you get an income-tax deduction for the amount of estate tax paid on the IRA assets you received. Let's say you inherited a $100,000 IRA, and the fact that the money was included in your benefactor's estate added $35,000 to the estate-tax bill. You get to deduct that $35,000 on your tax returns as you withdraw the money from the IRA. If you withdraw $50,000 in one year, for example, you get to claim a $17,500 itemized deduction on Schedule A. That would save you $4,900 in the 28% bracket.

State tax paid last spring
Did you owe tax when you filed your 2011 state income tax return in the spring of 2012? Then, for goodness' sake, remember to include that amount in your state-tax deduction on your 2012 federal return, along with state income taxes withheld from your paychecks or paid via quarterly estimated payments.

Refinancing points
When you buy a house, you get to deduct in one fell swoop the points paid to get your mortgage. When you refinance, though, you have to deduct the points on the new loan over the life of that loan. That means you can deduct 1/30th of the points a year if it's a 30-year mortgage. That's $33 a year for each $1,000 of points you paid -- not much, maybe, but don't throw it away.

Even more important, in the year you pay off the loan -- because you sell the house or refinance again -- you get to deduct all as-yet-undeducted points. There's one exception to this sweet rule: If you refinance a refinanced loan with the same lender, you add the points paid on the latest deal to the leftovers from the previous refinancing -- and deduct that amount gradually over the life of the new loan. A pain? Yes, but at least you'll be compensated for the hassle.

Jury pay turned over to your employer
Many employers continue to pay employees' full salary while they serve on jury duty, and some impose a quid pro quo: the employees have to turn over their jury pay to the company coffers. The only problem is that the IRS demands that you report those jury fees as taxable income. To even things out, you get to deduct the amount you give to your employer.

But how do you do it? There's no line on the Form 1040 labeled jury fees. Instead the write-off goes on line 36, which purports to be for simply totaling up deductions that get their own lines. Add your jury fees to the total of your other write-offs and write "jury pay" on the dotted line.

American Opportunity Credit
Unlike the Hope Credit that this one has temporarily replaced, the American Opportunity Credit is good for all four years of college, not just the first two. Don't shortchange yourself by missing this critical difference. This tax credit is based on 100% of the first $2,000 spent on qualifying college expenses and 25% of the next $2,000 . . . for a maximum annual credit per student of $2,500. The full credit is available to individuals whose modified adjusted gross income is $80,000 or less ($160,000 or less for married couples filing a joint return). The credit is phased out for taxpayers with incomes above those levels. If the credit exceeds your tax liability, it can trigger a refund. (Most credits can reduce your tax to $0, but not get you a check from the IRS.)

Deduct those blasted baggage fees
In recent years airlines have been driving passengers batty with extra fees for baggage and for making changes in travel plans. All together, such fees add up to billions of dollars each year. If you get burned, maybe Uncle Sam will help ease the pain. If you're self-employed and travelling on business, be sure to add those cost to your deductible travel expenses.

Credits for energy-saving home improvements
It's widely believed that tax credit for energy saving home improvement have expired. And that's true for the credits that encouraged homeowners to replace windows and doors, add insulation and upgrade air conditioning and furnace systems to more energy-efficient units. But the most valuable credits still exist ... and will through 2016. These credits effectively refund 30% of the cost (including labor) of installing l qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. If you installed such a system in 2012, be sure to let Uncle Sam lend you a hand with the cost.

Additional bonus depreciation
A break that allowed business owners -- including those who run businesses out of their homes -- to write off 100% of the cost of qualified assets placed in service expired at the end of 2011. Although Congress did not extend this break retroactively as part of the fiscal cliff deal, bonus deprecation didn't disappear completely – it's available at the 50% level for qualified assets purchased in 2012.

Perhaps more valuable is a break Congress did make retroactive for 2012 purchases. The lawmakers restored a supercharged “expensing” provision -- which basically lets you write off the full cost of new assets in the year you put them into service. While the dollar limit for expensing had fallen to $139,000 worth of assets for 2012, the fiscal cliff deal boosted the cap to $500,000. Note that the right to use expensing phases out if you put more than $2 million worth of assets into service in 2012

Break on the sale of demutualized stock
The year 2012 brought another court victory for taxpayers battling the IRS over the issue of demutualized stock. That's stock that a life insurance policyholder receives when the insurer switches from being a mutual company owned by policyholders to a stock company owned by stockholders. The IRS's longstanding position is that such stock had no tax basis, so that when the shares were sold, the taxpayer owed tax on 100% of the proceeds of the sale. But after a long legal struggle, a federal court ruled in 2009 that the IRS was wrong. And this year, a federal district court sided with taxpayers, too. The courts haven't said what the basis of the stock should be, but many experts think it's whatever the shares were worth when they were distributed to policyholders. If you sold stock in 2012 that you received in a demutualization, be sure to claim a basis to hold down your tax bill.

Tax-free transit subsidy
The fiscal cliff deal signed by President Obama's autopen on January 2 brought a retroactive break for commuters who use public transit to get to work in 2012. Last year, folks who drove to work could receive up to $240 tax-free from their employers to cover the cost of parking. But, due to a glitch in the law, workers who used mass transit were limited to $125 a month tax-free to pay for their bus, subway and train rides to the job. The new law brings parity to the tax break, hiking the tax-free limit for transit expenses to $240 ... retroactive to January 1, 2012.

At this writing, it's unclear exactly how transit riders will be able to claim this money-saver. But if your employer offers a transit-subsidy program and you spent more than $125 a month in 2012, you could be due a refund of both income and Social Security taxes. Check with your human resources office.
Contact Chet at 888-753-2521 ofc or email questions to .

Monday, January 28, 2013

IRS Due Diligence and Compliance

Current requirements for taxpayers this year is going to be easier for the employed and self employed non ethnic filers.  The self employed that have been immersed in a culture rich with deception and the illusion of wrong doing will find it more difficult.  Many have missed filing for years and they actually qualify for the earned income credit.  Not only do they qualify for the earned income credit, but they should also be participants in the first time home buyer program. 

No one need till many of the taxpayers that they have done nothing wrong. The belief of righteousness as a relationship to employment is so conditioned into the fiber of many low income taxpayers that they believe that they are actually income deficient.  In actuality, they are not.  Many can document their income quite well, but in many cases they are persuaded to allow someone else to climb their children fraudulently.  This will come to a screeching halt this year as a result of the due diligence requirements and documentation needed to support and claim a dependent for the child credit.

The economic turnaround will occur once again without engaging the economy of low income African Americans that are actually ripe for participants in the first time home buyer program.  Unless low income self employed filers are taken seriously as taxpayers.  The difficulty herein is the IRS's aggression toward the fabric of the African American culture and what they have done to survive into the transition of the millennium and the recent depression could undermine this much needed movement.  Participate in this recovery by telling your friends and family claim their own kids and follow someone who has guidelines for documenting income and their dependent's residency.

Many of us know some African Americans that have never filed taxes because they don't have a job, but have allowed themselves to be exploited by their friends and family because they are not aware of how to document their income.  The IRS requirements for allowing a refund in case of an audit of these individuals perpetuates this exploitation by requiring many self employed low income taxpayers to have license, website, journals and operational books of receipts and expenses for income documentation.   Many of these taxpayers earn income and should step forward and file. 

This harrasment by the IRS should stop and actually be a gimme to low income taxpayers that meet earned income credit requirements because many of them have cars, homes, clothes, electronics and I am finding that it wasn't obtained illegally.  See from observations I have noticed peddlers selling watches as if they are stolen, but they where actually purchased from the Merchandise Mart and marketed in parking lots as if they are hot to make the purchase seem as if it's a discount. The delusion is a setback to African Americans cultural social economy. 

There are ways to document legitimate income made from babysitting, baking cakes, selling scrap metals, selling goods on eBay or craigslist, referring clients in your circle of influence for a fee and tons of things that people do on a day to day basis.  Transferring this information to forms that conform to due diligence requirements has not guaranteed refunds for many clients that qualify for the earned income credit.  Cultural difference may be taken into account at some point in the future and presentation is everything.  Documentation is  key and that will be taken into account. Meanwhile, as we wait, write your congressman and share the information that you have learned.

Contact my group at 888-753-2521 ofc or 888-675-0583 fax or request documents by emailing me at


Sunday, January 13, 2013

Health Related Tax Credit

Eligibility for the Refundable Health Related Tax Credit Tightened
Code ˜36B currently provides a premium assistance credit for eligible individuals and families who buy health insurance through an exchange. The credit, which applies to tax years ending after December 31, 2013, is refundable and subsidizes the purchase of certain health insurance plans through an exchange.
The credit is available to individuals who file single or married filing joint with household incomes between 100% and 400% of the federal poverty level and who do not receive health insurance through an employer or a spouse employer.
For purposes of the credit, household income is defined as the sum of: (1) the taxpayer's modified adjusted gross income (MAGI), plus (2) the aggregate MAGI of all other individuals taken into account in determining that taxpayer's family size (but only if those individuals must file a tax return for the tax year). Under existing law, MAGI is defined as adjusted gross income increased by: (1) any amount excluded by Code 911 (exclusion from gross income for citizens or residents living abroad), plus (2) any tax exempt interest received or accrued during the tax year.
The 3% Withholding Repeal and Job Creation Act signed into law by President Obama on November 21, 2011 revises the definition of MAGI to include the amount of the taxpayers Social Security benefits that are otherwise excluded from gross income. As a result, MAGI is now defined as adjusted gross income plus: (1) any amount excluded by Code Sec. 911 (exclusion from gross income for citizens or residents living abroad); (2) any tax exempt interest received or accrued during the tax year; and (3) the
amount of Social Security benefits of the taxpayer that is excluded from gross income under Code 86.  Call 888-753-2521or email for more information.