Tax Planning in 2012 for 2014 Exchange Subsidies

[Yagents]

This is for your clients, and some of you out there:

Many don't realize that 2012 adjusted gross income will affect the amount of subsidies you and your clients will receive in 2014. (because your 2013 tax filing isn't due until April 15, 2014).

So, it's best to make those IRA/SEP contributions, HSA contributions, and any business expenses in this tax year; to lower that AGI for 2012 (technically MAGI).

Be sure to leverage my HSA site below to educate your clients on where and how to make contributions.

 

[AllenChicago]

Great idea, especially since the Exchanges are SUPPOSED to be ready for people to enroll (and I assume find out their subsidy level) in October 2013. Only a mere 11 months from now. Wow. Thanks for alerting us, YAgents.
-ac

 

[Ann H]

So...... Let's say a guy makes $95,000 in 2012 and doesn't qualify for a subsidy for his family of four. But then he loses his job in 2013 and his income plummets to $15,000. January 1, 2014 he must enroll for Obamacare rich benefits at rich premiums. How can he prove he should get a subsidy?

 

[Yagents]

So...... Let's say a guy makes $95,000 in 2012 and doesn't qualify for a subsidy for his family of four. But then he loses his job in 2013 and his income plummets to $15,000. January 1, 2014 he must enroll for Obamacare rich benefits at rich premiums. How can he prove he should get a subsidy?

Ohhhh, that's a doozie of a question. I know the reverse calls for a "clawback" of subsidies. This situation may require him to wait until annual enrollment time and after he files his taxes. But I really don't know. Good question for the Dec 4th meeting. Change you can believe in.