Question of how Income is Determined for Aca?

goget

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My friend asked me this question and I did some research and really don't know the answer.he asked me how income is determined to qualify for subsidies. I know aca is based on magi which is basically agi adding back a few items . His agi shows loses due to loses in his business that carry forward yr to year. So let's say he has $200k of loses that carry forward and make his agi negative yr after yr but he makes $50k in 1099 gains. Are his Obama care subsidies based on his agi that is negative ? From all I've read it's what his agi is period .
 
My friend asked me this question and I did some research and really don't know the answer.he asked me how income is determined to qualify for subsidies. I know aca is based on magi which is basically agi adding back a few items . His agi shows loses due to loses in his business that carry forward yr to year. So let's say he has $200k of loses that carry forward and make his agi negative yr after yr but he makes $50k in 1099 gains. Are his Obama care subsidies based on his agi that is negative ? From all I've read it's what his agi is period .

You've heard wrong...............MAGI. See attached, read fine print.
 

Attachments

  • UC Berkeley MAGI_summary 7 - 2014.pdf
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so that magi is very vague. are you saying carry forward loses that take your agi negative are disallowed for magi? Also I see nothing on there about self employed people who have huge expenses in the course of business. Are you saying if an insurance agent gets 1099's $100k and has $50k of expenses from office to milage is considered to have $100k of magi?Lol it says in the footnote "You may be able to deduct certain business expenses" and only lists a few stupid ones. I don't believe that.
 
so that magi is very vague. are you saying carry forward loses that take your agi negative are disallowed for magi? Also I see nothing on there about self employed people who have huge expenses in the course of business. Are you saying if an insurance agent gets 1099's $100k and has $50k of expenses from office to milage is considered to have $100k of magi?Lol it says in the footnote "You may be able to deduct certain business expenses" and only lists a few stupid ones. I don't believe that.

Oh goodness...............
 
ok guru explain how it works?if I make $100k in insurance 1099's and have $50k of expenses and net $50k what do I report as my magi income for Obama care. That's why I posted on this forum as I don't know. If my adjusted gross income is -$100,000 were does it say this is disallowed? i'm trying to understand how this works
 
ok guru explain how it works?if I make $100k in insurance 1099's and have $50k of expenses and net $50k what do I report as my magi income for Obama care. That's why I posted on this forum as I don't know. If my adjusted gross income is -$100,000 were does it say this is disallowed? i'm trying to understand how this works

I'm not a CPA. (And I don't play on on TV).

I do not advise people on how to do their taxes. We discuss their annual salary and bonus. I ask what last years MAGI (line 38 on the 1040)was. We base it off that.

Then we discuss the clawback, cliffs and possible outcomes for next years taxes.

For self employed people, they get to guess. Not kidding. Most self employed people can guesstimate their income.

Its all based on line 38. How the CPAs and turbo tax get there is not my issue. I don't do tax advice.
 
ok guru explain how it works?if I make $100k in insurance 1099's and have $50k of expenses and net $50k what do I report as my magi income for Obama care. That's why I posted on this forum as I don't know. If my adjusted gross income is -$100,000 were does it say this is disallowed? i'm trying to understand how this works

You are asking tax questions in an insurance forum, maybe you should find a CPA forum and ask them.

Would you ask a CPA for advice on copays, coinsurance, network availability, and how to enroll?
 
As of now, in America, we only pay taxes on profits. A future regime might tax you on revenues, and penalize you for any expenses.
 
Someone please give me a CPA who has a clue about the ACA, they SHOULD know but so far they have had no idea how any of this works. So far all they seem to know is how to report their subsidies and penalties, no idea on how to do MAGI estimates.
 
Someone please give me a CPA who has a clue about the ACA, they SHOULD know but so far they have had no idea how any of this works. So far all they seem to know is how to report their subsidies and penalties, no idea on how to do MAGI estimates.
:) See what is on the Marketplace website: "How to make a ballpark estimate

Start with your adjusted gross income (AGI). You’ll find this on your most recent federal income tax return. For most people, you can just use your AGI as your ballpark estimate for Marketplace eligibility.

Where to find AGI on IRS tax forms:

Form 1040: Line 37
Form 1040 EZ: Line 4
Form 1040 A: Line 21
Add or subtract certain types of income

Some people may have to add or subtract items from their adjusted gross income to make a more accurate estimate.

Add the following kinds of income, if you have any:

Excluded foreign income
Nontaxable Social Security benefits (including tier 1 railroad retirement benefits)
Tax-exempt interest
Don’t include any Supplemental Security Income (SSI)

Now adjust your estimate for 2015

Remember, your eligibility for premium tax credits and out-of-pocket savings is based on your expected income for 2015, not your 2014 figures. So do your best to account for any changes you think will happen in 2015.

Consider things like expected raises, new jobs, or other employment changes; higher or lower tax deductions; and changes in income from self-employment.

Also account for any expected changes to your household, including gaining or losing tax dependents."

Everything else, related to your income, you should search somewhere else. How creatively you do your taxes is pretty much up to you. I am trying to plan for them during first 3 months of the particular year. Later on, might be too late. If anybody has good suggestions for insurance agents-brokers, I will appreciate.
 
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