Jae Oh, author of, has joined Robert Powell, the editor of Retirement Daily, to discuss how large capital gains distributions from mutual funds can influence a taxpayer's advanced premium tax credit or income-related monthly adjustment amount.
Because of this, the mutual funds often distribute capital gains at the end of the year, Oh begins by explaining. Vanguard distributed substantial capital gains in 2021, which was a huge surprise to shareholders.
This may sound right now, but a large capital gains distribution may have a very significant impact on a person's taxable income.
Capital gains distributions might be impacted by advanced premium tax credits under the Affordable Care Act. This reduces the premium tax credit and increases the health insurance premium.
In Medicare, capital gains distributions might adversely affect the IRMAA for patients.
The adverse effects of large capital gains distributions are not going away. As more and more people work beyond the age of 65, more and more people will be affected. This means that it is necessary to be tax-efficient in your investing and income distribution.
Watch. For more information, please contact the office.
Follow us on and!
