Hi everyone...fall is certainly here with its drastically cooler weather (perfect hiking weather!). I hope all is well with you and your families.
For those who use (or plan to use) the "marketplace" for applying for subsidized healthcare for upcoming 2024 (the official website is healthcare.gov), are you confident in your ability to "tell" it how much income you plan to earn in 2024?
As a refresher, the estimated income you provide on the application will be the basis for which the subsidy is computed for the upcoming year. If you get this wrong, when you file your 2024 taxes at the end of next year, you will get a refund of the subsidy "tax" (good in a way) or owe a "tax' back to them for any over-subsidy they gave you (definitely bad). Therefore, to avoid these wildcards on your 2024 tax return, it is important to guess your upcoming income as accurately as possible on the application.
The specific income figure they ask for is MAGI (modified adjusted gross income), which is for the most part your tax return adjusted gross income (AGI). Come this November, your starting point idea of this would be from your 2022 filed tax return. However, you need to be looking ahead to 2024, so will you know how to adjust your 2022 AGI to come up with the estimated 2024 AGI?
If you need help with this, Kathryn Bruns CPA can do a 2024 AGI projection for you. I recently completed 2023 projections for old and new clients, for other reasons. Future tax projects are useful for a lot of tax and cash flow budgeting reasons, so let us know if you need help. If not, I'll be in touch "soon" for the upcoming 2023 tax season !
See attached IRS Rev Proc for some more detail if you like....
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