Can I Deduct Health Insurance Premium Payments?
I received benefits under the AFC act which pays a portion of my monthly premiums. I still pay $777.44 per month from my own funds. If I did not pay these funds I would not have insurance. Therefore, are the personal funds I paid toward the total premium tax deductible as a medical expense?
As a note I think it is unfair that some people are being allowed to ignore the error that was made in calculating how much they were entitled to by the government toward the monthly premium and those of us who got conflicting answers from the MarketPlace (I got two saying my original form was correct and two and said it was incorrect). I am having to refund that.
This is putting a tremendous tax burden on me, especially when you have to add back in the half of your social security payment that may be tax free. This provision, caused my estimate of what my income would be to be off by several thousand dollars.
If you are self employed, or if your medical expenses are over 10%, you can deduct health insurance premium payments.
To your other point, we are really sorry to hear that! People who are getting to keep the difference are keeping small amounts. Generally the incorrect piece of information doesn't change the amounts owed or refunded by much. If you got an incorrect 1095-A, and it would benefit you to file with it, you can and you can probably keep the difference too. That being said, if you've already got the corrected one you are supposed to file with the correct form. If you can't figure out which one is correct, filing with the one that gives you the biggest break seems smart. That is the gist, still we would truly suggest to anyone that they double check their own 1095-A info and simply file using the right information. There may not be a reward from the IRS for doing things the right way, but that doesn't mean doing the right thing isn't a reward in-and-of-itself.
The answer to the first question confirmed what I thought would be the answer, so I do appreciate that?
The second question goes to a major issue with Obamacare collection of facts. I received a corrected form and am using it with my income tax software to figure the correct answer. This is going to cost me $1,800. At the same time, my premium is being reduced almost $200 without my doing anything. Why wasn’t I given the option of paying the overpaid subsidy with the savings I am getting on my premium, or will I be facing a similar situation next year. I have told Marketplace.Gov what my expected income will be. I may have a new stream that will go into my IRA and be withdrawn as needed. Thus my year-end balance could be different that what I projected. Do I have to call every month and report how much I withdrew from my IRA?
It’s all based on estimated MAGI income as a percentage of the Federal Poverty Level. You can take as much or as little money in advanced tax credits as you like. Your IRA withdrawals WILL count toward MAGI. Our suggestion, when income is uncertain, is always to claim minimal or no tax credits up-front to avoid repayment. We also suggest using an HSA to reduce MAGI and pay for care tax-free.
Check out the repayment limits. Some people can take little deductions that will limit the amount they have to repay based on income. https://obamacarefacts.com/advanced-tax-credit-repayment-limits/
Also you may want to double check your 1095-A information. You can find all the info yourself to ensure that you really are using the correct data. https://obamacarefacts.com/2015/03/12/didnt-get-1095-a-or-ecn/