Tax Liability of Subsidy

ohtobnaz

Expert
28
I don't understand how this works for a self employed person. If they can usually deduct their entire health premium before line 37, then what portion of the ACA premium will they be deducting for 2014?
 
The portion they are paying.


So if their annual income is fairly constant, the lower premium will not only raise your taxes on the difference compared to the prior tax year, but it would seem that the added incomes additional bearing on the size of your subsidy could have a large impact when it adjusts itself at the end of the year.

So if they used the entire subsidy, you would want to add the change in the two years health insurance premiums back into their estimated income to lessen the likelihood of additional 2014 taxes?
 
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