ACA Tax Complication – How The Affordable Care Act (ACA) Marketplace Complicates Tax Returns

ACA Tax

ACA Tax Complications

No one wants a big surprise at tax time, which is why Tax Samaritan recommends that clients review their tax situation and make any necessary last-minute adjustments to withholding or estimated tax payments due to anticipated ACA tax complications this year.

This used to be a simple process, but this year many taxpayers who obtained health insurance through the Affordable Care Act Marketplace may be in for a big ACA tax surprise at tax time.

As part of the Marketplace, eligible taxpayers had the option of receiving a subsidy to help pay their monthly health insurance premiums. This ACA tax subsidy was paid directly to the health insurance carrier and was considered an advance of the premium tax credit. Eligibility for the ACA tax subsidy was based on estimated household size and income.

Generally, individuals and families with estimated household incomes for the year between 100 percent and 400 percent of the federal poverty level for their family size were eligible for the subsidy.

One person: household income between $11,490 and $45,960

Family of two: household income between $15,510 and $62,040

Family of four: household income between $23,550 and $94,200

If your actual 2014 household income exceeds these amounts and a subsidy was granted, the subsidy will need to be repaid on your 2014 federal tax return. Sadly, it’s fair to say some people will see some unexpected, unpleasant surprises on their tax returns next year.

Many people were exempt from the Marketplace, so the subsidy was not allowed. Those exempt were already receiving affordable minimum coverage through an eligible employer plan, were eligible for Medicaid, Medicare, CHIP or TRICARE, or were claimed as a dependent on another person’s tax return.

Filing a tax return can be daunting with these ACA tax complications and stressful without the advice and guidance of a tax expert, such as the Enrolled Agents at Tax Samaritan. Enrolled agents receive their licenses from the Department of Treasury – we’re America’s Tax Experts®.

Our goal at Tax Samaritan is to provide the best counsel, advocacy and personal service for our clients. We are not only tax preparation and representation experts, but strive to become valued business partners. Tax Samaritan is committed to understanding our client’s unique needs; every tax situation is different and requires a personal approach in providing realistic and effective solutions.
Click the button below to request a Tax Preparation Quote today to get started with the preparation of your US tax return.

Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.

When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).

Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.

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