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BulldogTom

Rant - I hate Obamacare - not political

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Taxpayer is a family member.   Not the smartest cookie in the box, but we love him just the same.   Signed up for Obamacare, eligible for the APTC.   All good, his income and his spouse income properly estimated.   The amount of the PTC and the cost he paid is pretty much right on....EXCEPT....his wife and he got into a fight and she left him at the end of October.   He cannot locate her, as she moved to another state and blocked his calls to her cell phone.   He has no option but to file MFS.   Guess what, that means an otherwise qualified individual who is right in the wheelhouse of who this law was supposed to help, cannot use the PTC because of the MFS status.

I know, he can file as abandoned/abused and get around the penalty...But it just seems so unfair to me that when life happens, and your situation changes, here comes uncle Sam to slap you in the face again because you could not foresee that your life was going to change dramatically before the end of the year.  Taxes are not fair, but this is insurance, not tax.  

I so wish that the testing of income for PTC was the prior year AGI.   It would make things so much fairer (is that a word) if you had some certainty on what the maximum you will have to pay for the required insurance the government requires you to buy.   We would never by auto insurance, homeowners insurance, or life insurance based on a cost we did not know until the year was over.   Just think if you bought an auto policy in January for the year, and then in May you got into an accident and State Farm calls you up and says you have to pay another 4K on the policy because you estimated that you would not have an accident, but since you were wrong, here is the bill.

This is STUPID, STUPID, STUPID.

Rant over.   

Tom
Modesto, CA

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I agree 100%, and also not for political reasons.  There are serious shortcomings in this law, many of which revolve around fairly mundane life changes. I've mostly refused to prepare returns having anything but the most basic & routine ACA issues.  Had a single-mom client this year who got married in the 4th quarter.  I took a couple of stabs at it and came up with figures 100% out of sync, depending upon some assumptions I made about what the rules actually SAY. 

I finally gave their stuff back to them and told them to try HRB or another chain.  At least there they will have someone with deep pockets to cover the penalties if THEY mess it up.  Sure enough, they went to the two major chains in our area and also got vastly different results.  I don't know who they used (and really don't care,) but I think I could accurately guess. 

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Agree, ACA issues have been far more challenging to me than any tax laws. 

I suspect 90% of the "unaffordable" code uses are false.  And 100% of them are not caught.  I came to this conclusion thru guessing.

Also, Tom, if runaway spouse was covered, not-the-smartest-but-loveable can allocate 50% to her.  I don't think that's the case, but that's the only hope I have. (For this situation, not for you.) ✌️😎

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Just now, RitaB said:

 ✌️😎

My apologies if that combination is the universal symbol for weed or something. 

 

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--->  I suspect 90% of the "unaffordable" code uses are false.  And 100% of them are not caught.  I came to this conclusion thru guessing. <-----

Rita: Your methodology is unassailable.  I should have taken your "Probability and Statistics" class after having spent all that time as your star Algebra pupil 15 years ago.  ✌️😎

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1 hour ago, RitaB said:

My apologies if that combination is the universal symbol for weed or something. 

 

Duuuuuuude.

Here's the symbol for pot: 🍲

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Bulldog Tom,

Good explanation of your customer's case and good analogy.  If I am not mistaken, that part of ACA will not change next year. Once a person enrolls on the "exchange",  the law will remained unchanged. I guess we will have ACA for a while and I am not a fan of it either.

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On the other hand, I have met other accountants who previously could not get any health insurance due to pre-existing conditions.

For people like them, the ACA has been a lifesaver!  So, yes it's a PITA, but it's saved the lives of many of our fellow citizens.

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On ‎4‎/‎14‎/‎2019 at 12:24 PM, cbslee said:

On the other hand, I have met other accountants who previously could not get any health insurance due to pre-existing conditions.

For people like them, the ACA has been a lifesaver!  So, yes it's a PITA, but it's saved the lives of many of our fellow citizens.

This is the only good thing I see about it, and I'm glad that folks who've been responsible and always had health insurance but lost it due to illness can be covered.  Even if it's very expensive for them.  I'm sure they're happy to pay.

I honestly don't know one soul in that category, but I do have several clients who've never had insurance, never wanted insurance,  but got insurance they've never used, because they were afraid of the SRP.  One has a return here right now, not picked up.  When she dropped off I asked where her 1095-A was.  "Oh, that went away this year." 

Me:  Did you not have health insurance in 2018?

She:  Oh, yes, and it was free.  Isn't that great??

I did tell her as nicely as I could that it most certainly was not free, not donated to you by Blue Cross and Blue Shield of TN, and if your income goes up, you will be re-paying the premium.

She:  What premium?

I got her file out of the cabinet and pointed out to her the APTC she received in 2017.  She had no clue.  None.  The wheels did start rolling around in her head, and she asked what would happen if she married her wealthy boyfriend.  I told her.  She decided she would drop the insurance if that happened.

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You know me, Rita.  I have had health insurance my entire life, mostly with the same company.  My premiums were getting completely out of sight, and I am still 5 years away from Medicare (if nothing changes).  When ACA came into effect, my cost was cut in half even though I am paying the entire premium and receiving no credit.  It has been going back up every year (just like it did before the ACA) but it still has not reached the high point that it was at before.  I agree that there are some problems with this particular piece of legislation.  but instead of trying to fix it one side wants to eliminate it and the other side wants to get a pie in the sky impossible to pay for plan.  Who is on my side?

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18 minutes ago, Gail in Virginia said:

You know me, Rita.  I have had health insurance my entire life, mostly with the same company.  My premiums were getting completely out of sight, and I am still 5 years away from Medicare (if nothing changes).  When ACA came into effect, my cost was cut in half even though I am paying the entire premium and receiving no credit.  It has been going back up every year (just like it did before the ACA) but it still has not reached the high point that it was at before.  I agree that there are some problems with this particular piece of legislation.  but instead of trying to fix it one side wants to eliminate it and the other side wants to get a pie in the sky impossible to pay for plan.  Who is on my side?

I am on your side.   There was a better solution than this plan.  I have also had insurance my entire life.  Until 2015 when I joined a Health Sharing Ministry because the premiums for myself and two kids was $10,000 with a $10,000 deductible.  I am on your side.  And I know you're on my side, too. 

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I am on everybody's side, and it was not my intention to get into what is good and what is not about the provisions of the law.   I was strictly looking at the tax implications for my client based on a situation that he had no control over that is now going to put him into debt to the government for the foreseeable future .   I just am flabbergasted at how the IRS and congress have put so much uncertainty into the pricing of the required insurance, and the way you can be punished for not being good at predicting the future.    

I wish they would put some certainty into the pricing (taxing) model they are using.   That way, in November when you go to sign up for the next year, you can make an informed decision on the choice to buy or pay the penalty.   If I knew at the beginning of the year that the penalty was 2.5K for not having the insurance, and the cost was 2.5K per month to insure my family, they I could make the choice based on certainty.   Right now, there is no way to know what the cost of the insurance really is until you have prepared your tax return.  And added up the income of the rest of the family.   Can you imagine telling your 17 year old to not get a job after graduating high school because it will increase the cost of your insurance tax?   

Tom
Modesto, CA

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Yep, do like Medicare and base it on the prior year's tax return, or two years ago, or whatever it takes to have the returns in the system and be a known income instead of predicting next year.

That girl with the wealthy boyfriend, she can't just drop marketplace insurance during the year when she weds. Has to drop it at the end of the year before the wedding to avoid paying back her APTC.

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3 hours ago, Lion EA said:

Has to drop it at the end of the year before the wedding

And if it's a whirlwind romance, she may not even have MET him by then!

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15 hours ago, Lion EA said:

That girl with the wealthy boyfriend, she can't just drop marketplace insurance during the year when she weds. Has to drop it at the end of the year before the wedding to avoid paying back her APTC.

Something else I'll get blamed for.  That has been an enormous PITA, not knowing all the ways to save them from repaying subsidies.  Not knowing who's going to purchase insurance solely to avoid the SRP.  Not knowing who's going to purchase private insurance when they would have qualified for APTC.   Not even wanting to know because I couldn't even keep the insurance I didn't like, and why is all this in our laps anyhow? 

Guess when she picks up her return, I'll tell her that.  Oh, wait, if she drops it Dec 31, and has an accident January 10, but the wedding is January 15...  I guess she or whomever helped her sign up needs to read the FAQs online. 

She's in her 50's btw.  

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I had a client using Obamacare who got married in Oct and told me about it AFTER the fact.  They were pretty upset that "nobody told them" about the recalculation of their ACA subsidy and all that stuff.  I told them I'm neither a mind reader nor an insurance consultant.  Also told them they could complain to the preparer who they needed to hire to figure out the complicated recalculation, because I wasn't going to get into THAT territory either.  I had no interest in doing the research or assuming the risk of getting it wrong. Problem solved (at least on my end) 

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18 minutes ago, JohnH said:

I had a client using Obamacare who got married in Oct and told me about it AFTER the fact.  They were pretty upset that "nobody told them" about the recalculation of their ACA subsidy and all that stuff.  I told them I'm neither a mind reader nor an insurance consultant.  Also told them they could complain to the preparer who they needed to hire to figure out the complicated recalculation, because I wasn't going to get into THAT territory either.  I had no interest in doing the research or assuming the risk of getting it wrong. Problem solved (at least on my end) 

Yes, and thank goodness we are still free to decline business.  If they tell us we have to do every return that walks in the door, guess what?  Our prices are going up or we are getting out of the business.  

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If I have to do returns for anybody and everybody, whether I feel like i can trust what they tell me or not, I quit.  Some days I am ready to anyway, but that would definitely be the end of this for me.

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Guess who just called today when her self prepared return was sent back?   Looks like she wants to file MFJ now that we explained why she could not file single, why she would have to pay back the PTC, and why she needed to file a CA return for the wages she earned in CA.   She really did not understand that she was getting the PTC, and she really thought that if she moved to another state by the end of the year she would not have to file in CA.   How she came to those conclusions I don't know.

I think now that she has all the correct information, we can make this right by both of them and then they can go their separate ways after we get the return filed correctly.

Tom
Modesto, CA

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