#minimum income to file taxes
File Taxes For ObamaCare
If your year end income exceeds 400% FPL, you will have to return the total amount of Advanced Premium Tax Credits you received.
NOTE. It s important to verify your income and report changes in circumstances throughout the year. If your income changed, you may end up receiving too much or too little in advance. This can affect your refund or balance due when you file your 2014 tax return in 2015. Advanced Tax Credits are given based on projected income, you ll adjust this using your actual Modified Adjusted Gross Income when you do your taxes. Given subsidies are based on projected income, and then are adjusted for actual income, as many as half of recipients will be adjusting credits for actual MAGI.
If you choose to get it now (Advanced Premium Tax Credits): When you file your tax return, you will subtract the total advance payments you received during the year from the actual Premium Tax Credit calculated on your tax return. If the Premium Tax Credit computed on the return is more than the advance payments made on your behalf during the year, the difference will increase your refund or lower the amount of tax you owe. If the advance credit payments are more than your actual Premium Tax Credit, the difference will increase the amount you owe and result in either a smaller refund or a balance due. This is an attractive, but risky move. Owing money at the end of the year for something you already had stings a bit. Of course tax credits are based on income, so if it was calculated correctly upfront, you ll only owe significant amounts of money if you increase your household income significantly.
If you choose to get it later (Premium Tax Credit): You will claim the full amount of your actual Premium Tax Credit when you file your tax return. This will either increase your refund or lower your balance due. This is the safer move. As attractive as an up-front credit is, saving money on taxes is a lot more exciting then owing back money.
Learn more from the IRS .
FACT. H R Block estimates that up to one half of the approximately 6.8 million taxpayers who got subsidies in 2014 may have to send money back to the government. The ratios are so exact, you ll owe money or be owed money for any variation in income. So, the other half are likely to be owed money, with even fewer who will make no adjustments.
EXAMPLE: A single individual in 2014 who projected to make $20,422 (175% of the Federal Poverty Level) and chose to received the full amount of Advanced Premium Tax Credit. At the end of the year this individual actually earned $20,656 (177% of the Federal Poverty Level) and will have to repay a small amount of money when filing taxes. That amount will be a small fraction of the additional $234 made during the year.
Either way, it ll be important to adjust tax credits each year, both on your taxes and through the marketplace, to ensure you get the assistance you deserve, not more or less. Keep in mind H R Block is an accounting service that will most likely see a giant boom in businesses under the ACA.
Adjusting for Other ObamaCare Subsidies
If you got Cost Sharing Reduction (CSR) subsidies or Medicaid, but your income increased, and as a result, disqualified you from part of the assistance or the full amount, you will have to report this on your taxes. Unlike Premium Tax Credits, Medicaid and Cost Sharing Reduction subsidies do not have to be paid back. This may be an advantage for those whose yearly incomes vary slightly, but are consistently on the edge of the Cost Sharing Reduction subsidy income thresholds, especially if the full Premium Tax Credit offered is NOT taken in advance. See our Federal Poverty Level page to see where your income falls.
For most people, however, it is still important to report changes to income and family status to the Marketplace, so that changes to your Advanced Premium Tax Credits can be made when they happen.
Reporting ObamaCare for Small Businesses
Most businesses will simply defer tax filing duties to their accountant. Small businesses who received a tax credit for health insurance and will be filing themselves should go to IRS.gov for detailed filing information.
Tax credits for small businesses are available retroactively since 2010, although some restrictions apply. So, if you didn t claim your tax credits in past years, you can still claim them.
In order to claim the tax credit for Small Business health insurance premiums, you ll need to use a Form 8941 to calculate the credit. For detailed information on filling out this form, see the Instructions for Form 8941. If you are a tax-exempt organization, include the amount on line 44f of the Form 990-T. You must file the Form 990-T in order to claim the credit, even if you don t ordinarily do so.
If your business is eligible for the SHOP you can claim your tax credit there, but you ll still need to fill out Form 8941.
If you are a small business, include the tax credit amount as part of the general business credit on your income tax return.
Reporting ObamaCare Taxes for High Earners
Anyone in a higher tax bracket should know that there are other taxes which apply to them. Like with businesses, most folks in higher tax brackets will have the help of an accountant. Please see our section on ObamaCare taxes to learn about taxes that may affect you, like the new Medicare tax on investment income.
Don t forget, large businesses who are required to provide coverage, must report coverage status of employees and must make a Employer Responsibility Payment. The amount of the payment depends upon whether the employee used Marketplace cost assistance or not. See employer mandate for more details.
Other ObamaCare Tax Return Forms
See our complete list of Obamacare related forms closer to the top of this page. Here you can find other less common forms related to healthcare and the ACA.
Other Tax Form Examples Regarding the ACA in 2014 will be added below:
We will provide screen shots, additional forms, and further advice as we learn more related to the ACA and taxes. When in doubt we suggest referring to HealthCare.Gov. the IRS.Gov. or a local accountant.