How to Coordinate Year-end Tax Planning and Health Insurance Premiums

Jae Oh, CFP, author of Maximize Your Medicare, explains in this Retirement Daily video how to coordinate year-end tax planning and health insurance premiums.
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Year-end tax planning and health insurance Tax Year-end is a time for tax planning. It’s also time for coordinating your tax planning with your health insurance.

So said Jae Oh, CFP, author of Maximize Your Medicare in this Retirement Daily video.

“The world has become more complicated,” said Oh.

Among other things, taxpayers have to worry about the interaction between health insurance premiums and modified adjusted gross income.

So, persons who are applying for coverage in the Health Insurance Marketplace and who are applying advance premium tax credit need to consider their modified adjusted gross income.

The net premium that a person would pay is affected by their modified adjusted gross income, said Oh.

According to, if at the end of the year you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return. but if you’ve taken less than you qualify for, you’ll get the difference back.

Meantime, if you’re a Medicare beneficiary and your modified adjusted gross income is above a certain amount, you may pay an income related monthly adjustment amount (IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from two years ago.

So, for instance, distributions from mutual funds are taxable and can affect both individual health insurance premiums, as well as Medicare premiums in the future, said Oh. “That's why planning in advance before you get to the year-end is important,” he said.

Here’s a link to request a consultation with Oh if you would like more information.