To calculate your modified adjusted gross income (MAGI), you want to account for all of your household's income sources minus any business and/or personal deductions. The money you earn is not always the same as MAGI!
Income sources to include in your total income
- Self-employment income
- Wages from a W-2 Job
- Unemployment Income
- Social Security Benefits
- Social Security Disability (But do not include Supplemental Security Income [SSI])
- Retirement or Pension Income (Most IRA and 401k withdrawals)
- Alimony Received
- Capital Gains
- Investment Income (Interest & dividends earned on investments, including tax-exempt)
- Rental & Royalty Income (Use net rental and royalty income)
- Untaxed Foreign Income
- Include estimated income of all household members who are required to file a tax return.
- Do Not Include: Child support, gifts, supplementary security, veterans disability payments, workers’ compensation, proceeds from loan.
Deductions to subtract from your total income
The IRS allows you to deduct any purchases you made related to your self-employment that are considered typical of your industry or necessary for you to do your job.
- Alimony Paid
- Student Loan Interest
- Moving Expenses (If moving to be closer to job)
- IRA Contributions (If no retirement account through a job)
- Educator Expenses (Teaching supplies paid out-of-pocket)
- Tuition Cost
Do NOT deduct the following: Charitable contributions, child/dependent care expenses, child support payments, HSA Deposits, medical Expenses, mortgage interest, property taxes, state income taxes, etc.
- Utilize the Stride Tax app to easily keep track of your deductions for the year!
- Not sure if something is deductible? Check out our Stride Tax guides.
What happens if I estimated my income incorrectly?
Health insurance subsidies are reconciled by the IRS when you file federal taxes for that coverage year. When folks overestimate their income, they typically received a lower subsidy than they were supposed to during the year. In that case, the IRS will return any unpaid subsidy on their tax return for that coverage year.
If you underestimated your income and ended up receiving too high of a subsidy, you may see any overpaid subsidy taken out of your tax return for that year.
How do I update my income?
You can update the income reported on your health insurance application year-round. You can do so using your personal exchange account or Stride can update on your behalf!