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Wednesday, November 05, 2014

Reconciling May Yield Unwanted Surprise!

For the 8 million-plus taxpayers who purchased health insurance on the Exchange (now called Marketplace) there may be an unwelcome surprise awaiting them when they file their 2014 income tax returns.  The amount they paid for insurance was reduced by an “Advanced Premium Tax Credit”.  That credit was based on some assumptions.  For many (receiving a raise; a new job; getting married; getting divorced, etc.) factors resulting in those assumptions have changed.  Their eligibility for the credit gets reconciled on their 2014 income tax returns.  The result can be in a reduced refund or increase in balance due.

Additionally, the reconciling process is complicated.  So for many who have been self-filing, they may now require professional help for a fee.

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