Best Ways to Maximize Tax Credits In the New Health Care Marketplace

Posted by | September 13, 2013 | Uncategorized | No Comments

The main reason that so many people don’t currently have health insurance stems from the fact that most middle class families simply can’t afford the high cost of monthly premiums. The new Affordable Care Act will make health insurance as affordable as possible for families. To offset the high cost of premiums, the government has created tax credits to help the average family pay for coverage. There are some tricks you can use to ensure that you’ll get the maximum amount of tax credits that you deserve.

 

#1  Don’t Assume Your Ineligible for the Subsidies

Just because you and your spouse make a decent wage, it doesn’t mean you won’t qualify for any of the tax credits that have been created to off set the cost of health insurance. Based on the current government standards, a family of four that has an average household income of $94,200 will qualify for some tax credits.

 

#2  Don’t Mention the Possibility of Wage Increases

When applying for the tax credits it’s important to remember that the government wants an estimate of your 2014 earnings. Be very careful about how you report this. If you work at a salaried job, you can use the amount of money that you earned in 2013 to calculate your anticipated earnings in 2014. Unless a yearly wage increase has been mentioned in your work contract, don’t anticipate one, and don’t mention the possibility of your getting a wage increase, even one to cover increased cost of living, until the additional money starts to show up on your weekly paychecks.

 

#3  Wait Until after January 1, 2014 to Apply for a Second Job

If you’re considering the possibility of taking on freelancing work or an additional part time job, you should put these plans on hold until after the first of the year. The government can’t expect you to consider any earnings you haven’t begun to earn.

 

#4   Check Other Benefit Programs

You or your child may get free or low-cost coverage through Medicaid or the Children’s Health Insurance Program CHIP.

 

#5  If You’re Considering the Possibility of Having a Child in 2014, You Need to Report it

The more people you have in your family, the higher the tax credit you receive will be. If a baby is on the way, or if you fully intend to try to have a baby during 2014, you will want to include this information when you apply for your tax credits. Since having a child means additional medical expenses, you want to make sure you have the proper coverage.

 

#6  Consider Catostrophic Insurance

If you’re under 30 you’re eligible for this special, low cost insurance. Don’t expect to get much coverage, but you won’t get the tax penalty at the end of the year and you’ll be covered in case you have a traumatic injury.

 

You want to get the best possible tax credit, but be careful, you shouldn’t try to cheat the system. At the end of 2014, the IRS will look at the amount of money you made, and determine if the tax credit you received was much higher than you deserved. If they determine that you were credited too much, you could have to make up the difference.

 

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