Exchange Subsidy "Clawback"

[jbage007]

Did you know that after you sell your car that you have been writing off the business mileage on for a few years, that you must do a complicated calculation to determine how much depreciation you must recapture? Naturally, you then must pay tax on the difference.

This is the same theory.

In retrospect, you discover that you received tax benefits to which you were not entitled. The Government requires that you repay the difference.

What's unfair about that?

 

[somarco]

after you sell your car that you have been writing off the business mileage on for a few years, that you must do a complicated calculation to determine how much depreciation you must recapture?

I believe this needs to be qualified.

If you use depreciation + actual expenses your comment is correct, but if you simply use the mileage allowance I don't believe it applies.

Arnguy will know the correct answer.

 

[VolAgent]

Did you know that after you sell your car that you have been writing off the business mileage on for a few years, that you must do a complicated calculation to determine how much depreciation you must recapture? Naturally, you then must pay tax on the difference.

This is the same theory.

In retrospect, you discover that you received tax benefits to which you were not entitled. The Government requires that you repay the difference.

What's unfair about that?

No more complicated than determining your mileage deduction in the beginning. And considering how vehicles drop in value, about the only people it will effect is someone who uses a vehicle purely for business and sells it after only a few years. If you have trouble determining the depreciation you took versus the sale price and cost basis, then you had trouble taking the deduction in the first place.

If you are doing actual expenses and taking full depreciation unrelated to mileage, odds are you have an account doing your taxes.

Also, you don't claim what your mileage is at the beginning of the year to determine your tax only to find out later you drove fewer miles and own more in taxes. Finally, you don't then want that tax forgiven.

 

[Yagents]

Here is another quote from politico. Congrats on getting that job! Even more reason to take the extended unemployment insurance. Also, why didn't they use the 500B taken from Medicare to fund the dr fix? Instead, they are using money from PPACA portion

"For instance, someone who qualified for a subsidy because he was unemployed in the first half of the year may have to repay a large portion of that subsidy if he finds a job."
Under the health care reform law, if a person gets more of a tax subsidy than they're eligible for, they would have to repay no more than $250. Families would have to repay no more than $450. The deal on the table would raise those caps to between $600 and $3,500, depending on income." That will save more than $19 billion, enough to keep physician payments stable"

 

[Yagents]

The income you start making 10 months from now, will determine the amount of your exchange participation. Imagine all of those unemployed, who get free medicaid, then get a good paying job, to find they are back in a hole again. If you're a family of 4 in a high cost state and go from $0 income to a $90,000 job, you may be looking at a $9000 "clawback".

"The first health insurance exchange premium assistance tax credits are supposed to be paid in January 2014.
Most of the consumers who get those first credits will be applying in 2013 using their most recent tax returns, which will be for the 2012 tax year, the staffers say."

PPACA limits premium assistance clawbacks to:

• $600 for taxpayers earning less than 200% of the federal poverty level (FPL).
• $1,000 for taxpayers at 200% to 250% of the FPL.
• $1,500 for taxpayers at 250% to 300% of the FPL.
• $2,000 for taxpayers at 300% to 350% of the FPL.
• $2,500 for taxpayers at 350% to 400% of the FPL.
• $3,000 for taxpayers at 400% to 450% of the FPL
• $3,500 for taxpayers at 450% to 500% of the FPL.
• No clawback cap for taxpayers earning more than 500% of the FPL.

The Camp bill would set the following clawback caps:

• $600 for taxpayers at less than 200% of the FPL.
• $1,500 for taxpayers at 200% to 300% of the FPL.
• $2,500 for taxpayers at 300% to 400% of the FPL.
• No clawback cap for taxpayers earning more than 400% of the FPL.

House 1099 Fix Bill Could Affect Health Subsidy Rules - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

 

[TxOnline]

"It's a race to the bottom...sad"

That's what MamaGovt wants!
.....ALL of us to race to the bottom!

MamaGovt will take care of us (while our formerly-great country implodes)!

 

[Yagents]

This is a ACA tale of when a raise causes you to go over the 400% CLIFF...........she'll be able to read her kids a bedtime story one day.
"The day Obama took back the candy"

You Might Have To Repay Obamacare Subsidy If You Miscalculate Income : Shots - Health News : NPR

 

[TN_agent]

I had someone who retired in 2015 and cashed out their ENTIRE 401k because they thought they had to when they left the company. Like $250,000 or $300,000 worth. They called the marketplace directly at that time, weren't working with me.

Not only had to pay back all 2015 subsidy, also paid a whole lot of income taxes. Oh, and now they have to pay the IRRMA on Medicare for 2017 on their newly Medicare-eligible spouse to add insult to injury.

I asked them what they did with the money. They used about $30,000 to buy a new car and $20,000 to pay off their house. The rest is sitting in a savings account.

I can't even begin to calculate how much money they cost themselves in loss of future stock gains, income taxes they needlessly paid on money they haven't needed or used, IRMAA for 2017, and subsidies they had to pay back for 2015.

 

[RayNY]

I had someone who retired in 2015 and cashed out their ENTIRE 401k because they thought they had to ...

I can't even begin to calculate how much money they cost themselves in loss of future stock gains, income taxes they needlessly paid on money they haven't needed or used, IRMAA for 2017, and subsidies they had to pay back for 2015.

A good friend of mine is a police officer, he handles retirement benefits. Pretty much all he does all day is calculate the actual cost of the stupid things these guys want to do.

According to him, most of them just see it as a savings account because they get a pension anyway. It's a daily occurrence that someone wants to borrow for a new car, vacation, Christmas gifts, etc. The level of financial knowledge the average person has is very low, you almost need someone holding their hand making sure they don't do anything silly.