Subsidy Question. HELP!

Dec 15, 2015

  1. rdwylie
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    rdwylie New Member

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    I have a potential policyholder who I need help with. This person has a cleaning business with maybe 10 1099 contractors working for her. Her gross income is about 74k, but after she pays her subs her actual income is closer to 43k. My question is, which number do I plug into the ACA website to estimate a potential subsidy. She will get no subsidy if she reports the full income. Thank you in advance for your help.:confused:
     
    rdwylie, Dec 15, 2015
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  2. Yagents
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    Yagents Guru

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    Net profits people.
    If she 1099's the sub contractors, then it is a deductible expense.
     
    Yagents, Dec 15, 2015
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  3. Ann H
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    Ann H Guru

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    Yagents is correct. Of course.

    The payments to the 1099 subs is tax deductible as a business expense, and it flows to the Federal Form 1040 BEFORE Adjusted Gross Income (AGI) is calculated on line 37. You use AGI + tax-exempt interest, plus foreign income, plus the non-taxable portion of Social Security benefits as MAGI for calculating the premium subsidy.
     
    Ann H, Dec 15, 2015
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  4. jbage007
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    jbage007 Guru

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    Nicely wrapped up little package there, Ann. :yes:
     
    jbage007, Dec 16, 2015
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  5. AllenChicago
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    AllenChicago Guru

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    You got that right, JBage007. There are 2 or 3 other Tax-Savvy participants here in the forum, but they take 5 paragraphs to explain what Ann does in 1 paragraph that's EASY to comprehend. It's no exaggeration that in addition to members, hundreds of people simply visiting this forum are helped by Ann's guidance, year after year. Maybe thousands. There's no other venue like this on the net.
     
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