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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have a question regarding tax credits due to the new health

Resolved Question:

I have a question regarding tax credits due to the new health care law. A health insurance company who provides tax credits quotes me $500 with a $275 tax credit with an annual income of $40,000. My question's are:

1) Do I pay $225/month and then if my 2014 AGI is say $100,000 I have to pay back the $275/month credits TO THE IRS? Is that how it works?

2) If I apply in December 2013 with start date of 1/1/2014 is the number the insurance company goes off an ESTIMATE of my **2014** income, or do they go off my ESTIMATED 2013 income or do they go off my 2012 ACTUAL AGI? I am self employed by the way.

3) As you know, there is a health insurance premium deduction for self employed people. Will that still exist in 2014? Presumably we won't be able to get a tax credit AND deduct the remaining premium payment?
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Thank you for your question, and thanks for using JustAnswer.com

Megan C :

1) Yes, if your income is higher than the threshold, then you will have to pay back the tax credit when you file your taxes.

Megan C :

2) They would estimate your income based on your estimated 2014 income

Megan C :

3) Tax deductions in 2014 are tbd, but as it stands now it sounds like you will still be able to take an off the top deduction in 2014 for the premiums paid - this would be the premium less any tax credit.

Megan C :

Do you have any further questions? If your AGI is $100,000 I would not suggest estimating your income to be lower in order to use a tax credit.

Customer:

Thanks for the answer.

Megan C :

You're welcome

Customer:

Do you know what the thresholds are?

In 2012 I earned $100K and in 2013 I'll earn $40K. So I guess it is appropriate to estimate $40K for 2014?

Megan C :

If you think you will make that amount in 2014, yes

Customer:

I have another tax question which is off topic. Do you want me to answer another question. By the way: it is related to California taxes.

Customer:

i mean ASK another question

Megan C :

Would you mind closing out this one and opening a new one, so that we can get credit for both?

Customer:

Sure. How do I do that?

Megan C :

Rate this question, and then ask another one however you started this one

Customer:

By the way, do you know the thresholds for health insurance per our thread/

Megan C :

No, I do not know the thresholds off the top of my head

Customer:

OK. Let me know how to open a new question if you know.

Megan C :

Please take a moment to rate this response as excellent

Megan C :

and once you do that you should be able to open a new question

Megan C and other Finance Specialists are ready to help you
Expert:  Megan C replied 2 years ago.
Thanks, Harold for your positive rating. Please come back and visit me any time you need a question answered. It was a pleasure working with you today