Health Care Health Care, Taxes, and You: I received an advanced premium tax credit to offset the costs of health insurance. How will I know if I owe more money when I file my taxes? Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLisa Published Jan 30, 2015 2 min read Just like you, millions of Americans who purchased a Marketplace plan were eligible for tax credits to offset the costs of health insurance premiums. The Marketplace used your projected income and family size to estimate your 2014 premium tax credit. You will receive Form 1095-A from the Health Insurance Marketplace, which will have information regarding your insurance coverage like your insurance premium cost, date you were insured, and your advanced premium tax credit. When you file your 2014 taxes with TurboTax, you will enter the information from the Form 1095-A just like you would a W-2. TurboTax will calculate your actual premium tax credit you’re eligible for based your actual income and family size. If you overestimated your income when you applied for a subsidy, you may see a larger tax credit on your taxes, but if you underestimated you may see a reduced premium tax credit and in turn a lower tax refund or you may owe money back. The process to determine the premium tax credit depends on several variables (income, family size, marriage status, location, etc). TurboTax makes reporting your actual premium tax credit you’re eligible for easy by doing the calculations for you based on your entries. All ACA related tax forms are included at no extra cost through TurboTax. You can also check out our free tool on TurboTaxHealth.com to estimate your tax credit. On January 26, the IRS announced that taxpayers who owe money on their 2014 taxes due to excess advanced premium tax credit, will receive penalty relief if they can’t pay the balance owed. Going forward, in order to receive the most accurate advanced premium tax credit, make sure to notify the Marketplace about changes in circumstances as soon as they happen. Changes in circumstances that can affect the amount of the actual premium tax credit include: Increases or decreases in household income Marriage/Divorce Birth or adoption of a child Other changes in household composition Gaining or losing eligibility for government-sponsored or employer-sponsored health care coverage Change of address If you have more questions about the Affordable Care Act and how it impacts your taxes and finances, TurboTax has you covered. You can go to TurboTax Health and get your questions answered. Previous Post Are You Eligible for an Exemption? What to do Next… Next Post TurboTax Twitter Chat with Enroll America Focuses on Health Coverage… Written by Lisa Greene-Lewis Lisa has over 20 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. She has held positions as a public auditor, controller, and operations manager. Lisa has appeared on the Steve Harvey Show, the Ellen Show, and major news broadcast to break down tax laws and help taxpayers understand what tax laws mean to them. For Lisa, getting timely and accurate information out to taxpayers to help them keep more of their money is paramount. More from Lisa Greene-Lewis Follow Lisa Greene-Lewis on Twitter. 2 responses to “Health Care, Taxes, and You: I received an advanced premium tax credit to offset the costs of health insurance. How will I know if I owe more money when I file my taxes?” a failure of the planners on the changes to income, I used a 20,000 figure to guess at the beginning of the year, the change to income occurred in December by way of a Roth conversion.(resulted in a 13,000 figure) so I had higher deductables and more out of pocket expenses than I should have all year because the policy is determined by that guess. A silver policy for example, has 4 different levels depending on the income, that change deductible, premium and out of pocket costs. There is no way to rectify it, according to the IRS Reply Hi Tom, The change in income that occurred in December may have been to late to rectify, but you can make changes to your income for 2015. Also, the IRS did announce that penalty relief will be given to those that owe due to an excess advanced premium tax credit received. Thank you, Lisa Greene-Lewis Reply Leave a ReplyCancel reply Browse Related Articles Self-Employed Meet Moira Tax Planning TurboTax Enables Refund Advance to Taxpayers Investments Tax Benefits of Real Estate Investing Self-Employed Business Tax Checklist: What You’ll Need When Filing Uncategorized What Is Deferred Compensation & How Is It Taxed? Investments How Does an Inherited IRA Work? Work Choosing Your Business Structure: 5 Types of Businesses… Tax Deductions and Credits Are HOA Fees Tax Deductible? What You Need to Know Crypto Understanding Crypto and Capital Gains Work 7 Things You Need to Know About the New Business Report…
a failure of the planners on the changes to income, I used a 20,000 figure to guess at the beginning of the year, the change to income occurred in December by way of a Roth conversion.(resulted in a 13,000 figure) so I had higher deductables and more out of pocket expenses than I should have all year because the policy is determined by that guess. A silver policy for example, has 4 different levels depending on the income, that change deductible, premium and out of pocket costs. There is no way to rectify it, according to the IRS Reply
Hi Tom, The change in income that occurred in December may have been to late to rectify, but you can make changes to your income for 2015. Also, the IRS did announce that penalty relief will be given to those that owe due to an excess advanced premium tax credit received. Thank you, Lisa Greene-Lewis Reply