Modified adjusted gross income

MAGI is where health planning meets tax planning. A Roth conversion, the sale of a business or a large capital gain can push a client over a subsidy cliff or into a higher Medicare surcharge tier, which is why agents in these markets often coordinate with the client's tax preparer.

For Medicare, the Social Security Administration uses MAGI from the tax return filed two years earlier. For the Marketplace, the household estimates MAGI for the coming coverage year. Calculators that rely on income should label which year they mean.