Obamacare future income estimates could create surprise tax bills for millions of Americans. If citizens who fill out the government subsidies packet to reduce the cost of healthcare next year do not do so accurately, they could wind up owing the government money.
The Affordable Care Act will offer subsidies for the mandated health insurance coverage. State-based exchanges are being put into place for folks who do not already have medical coverage through their employers. The Obamacare subsidies are based upon income – the lower the income, the higher the subsidy.
The aspect of the subsidies causing controversy this week involves the inability of some citizens to accurately predict future income. When the approximately three-pages per family member Obamacare form is completed, neither the US government nor the applicant can gaze into a crystal ball and make sure an approved subsidy is not too large.
The best guess Obamacare subsidy form income figure means some Americans could ultimately owe a repayment. The Affordable Care Act funds will likely be distributed directly to the healthcare company and the savings passed onto policy holders in the form of a lower monthly premium.
Americans accepting a medical care subsidy will not know if they were overpaid until completing their tax return in 2015. If an already utilized subsidy was too high based upon the actual earned income, the citizen could experience either a smaller tax refund or large tax bill.
Some health care advocates, providers, and tax experts feel the general American public realizes the Obamacare subsidies exist, but are largely unaware about the guidelines in the new law. An application draft for the insurance subsidy reportedly asked filers to estimate their projected 2014 income if their current earnings could change or are not steady.
The Obamacare subsidy application runs about 15 pages long for a three-person family. The application for reduced cost health care reportedly does not inform filers that a repayment is possible if the family income increases.
Obamacare enrollment begins on October 1. Insurance subsidies are reportedly available to citizens who make up to 400 percent of the poverty level. For 2013, the qualifying income for a two-person family is $62,000 and for a family of four, the income level tops out at $94,200. Approximately 18 million Americans will be able to qualify for Obamacare subsidies.
What do you think about the healthcare subsidies and Obamacare?
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