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My First 1095A


Yardley CPA

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Would appreciate any assistance you can provide.

Single taxpayer who enrolled through the marketplace for January through May.  

1095-A

Annual totals:  Monthly enrollment: $2468.52

                        Monthly second lowest:  $2,232.50

                        Monthly advance payment of PTC:  $1,606.13

 

8962

Modified AGI: $51,910

Household Income: $51,910

Household income as percentage of federal poverty line:  401%

 

 I assume I need to include form 8962 with the return?  Line 6 Box "yes" is automatically checked based on the 401%  What is the next step?  I've never dealt with this before.

Appreciate your help. 

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15 hours ago, Yardley CPA said:

Would appreciate any assistance you can provide.

Single taxpayer who enrolled through the marketplace for January through May.  

 

8962

Modified AGI: $51,910

Household Income: $51,910

Household income as percentage of federal poverty line:  401%

 

Also, lest your client thinks they were "so close," you can point out that the highest number for that % line is 401.  I'm guessing line four was 11,770.  If so, the household income as percentage of federal poverty line is actually 441%.  I had one that was 589%.  I overrode the form and printed it for his copy and then restored before filing. 

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Perhaps your client could contribute to an IRA, if eligible, and get out of paying back the APTC.  You don't have to add back the IRA contribution to calculate Modified AGI.  It won't take much of a contribution to get back to say 399% of MAGI.

I've done this a few times and saved the client a lot of money.

Grace

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22 hours ago, RitaB said:

Also, lest your client thinks they were "so close," you can point out that the highest number for that % line is 401.  I'm guessing line four was 11,770.  If so, the household income as percentage of federal poverty line is actually 441%.  I had one that was 589%.  I overrode the form and printed it for his copy and then restored before filing. 

Rita...yes, line four was $11,770.  Just curious, why would you override for his copy?  

Grace and Deb...I included a IRA contribution of $1,500 to see if that would change anything...it doesn't.  If I went up to $4,000 in increases the refund by $600.  So not sure it makes sense for her to make an IRA contribution but I'll offer it to her anyway.  

I really appreciate everyone chiming in!

 

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24 minutes ago, Yardley CPA said:

Rita...yes, line four was $11,770.  Just curious, why would you override for his copy?  

Grace and Deb...I included a IRA contribution of $1,500 to see if that would change anything...it doesn't.  If I went up to $4,000 in increases the refund by $600.  So not sure it makes sense for her to make an IRA contribution but I'll offer it to her anyway.  

I really appreciate everyone chiming in!

 

 

22 hours ago, RitaB said:

Also, lest your client thinks they were "so close,"

 

I told this client of mine at 589% of poverty level last year that he would not qualify for APTC.  But he knew this insurance guy, BBFB (blah, blah, frikkin blah, per Possi).  We have an insurance agent here who has figured every single one of my clients' income incorrectly in "helping" them, and every single one has paid back the subsidy.  I didn't want my client taking his return to this guy (or someone else) and being told, "OMG, if she had only told you to put $100 in an IRA..."  I have a tremendous aversion to criticism.  That's the size of it.

For your client, a $6,500 contribution to an IRA would get him down to 386%.  A $5,000 contribution would get him down to 399%.  My client wasn't even close to being in a position where an IRA would help.  I didn't want anybody to be confused about that.

Plus, I used to be a Math teacher and it bothers me not to see the real number.  A lot.

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3 hours ago, Yardley CPA said:

Rita...yes, line four was $11,770.  Just curious, why would you override for his copy?  

Grace and Deb...I included a IRA contribution of $1,500 to see if that would change anything...it doesn't.  If I went up to $4,000 in increases the refund by $600.  So not sure it makes sense for her to make an IRA contribution but I'll offer it to her anyway.  

I really appreciate everyone chiming in!

 

The difference is paying it to the government or paying it to yourself.  It's true the dollar figure may be the same, but the benefit changes to one that she will some day get back.

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48 minutes ago, Tax Prep by Deb said:

The difference is paying it to the government or paying it to yourself.  It's true the dollar figure may be the same, but the benefit changes to one that she will some day get back.

Rita...I totally agree with you.  My preference would be to have her contribute to an IRA.  It just seems like she would be contributing a substantial sum to see the repayment go away.  Ultimately, it's worth it...not sure she is able to at this time.  But I'm going to float the idea and appreciate the suggestion. 

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