Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Penalties for Mistakes on Estimated Income?
Old 08-23-2013, 09:20 AM   #1
Full time employment: Posting here.
 
Join Date: Apr 2006
Posts: 925
Penalties for Mistakes on Estimated Income?

Let me start by admitting that I have only read a small fraction of what has been published regarding the new ACA regulations; so, this may be a very simple inquiry to answer. But, I have not found anything definitive yet.

If someone retires at the end of this year, or any year, from a relatively high income position intending to manage MAGI for the coming year at +/-300% FPL, I believe, from my limited reading both here and elsewhere, that there will be procedures in place to document the reason for anticipated change in income (retirement/unemployment) to obtain subsidy/rate reduction. Please correct this assumption if needed.

Then, assume things change in coming year and something comes along that is just too interesting and lucrative to pass up which pusses MAGI will above 500% FPL. While I realize any subsidies would have to be reimbursed, my question is if any penalties/fines/etc. would be levied in this situation; and, if so, what would be the magnitude?

Any insight, ideally with supporting official links, on this would be appreciated.
__________________

__________________
If there's one thing in my life that's missing; It's the time I spend alone
Sailing on the cool and bright clear waters; There's lots of those friendly people
Showin me ways to go; And I never want to lose your inspiration
CoolChange is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-23-2013, 11:06 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Jul 2012
Location: Mississippi
Posts: 1,878
I think you are good assuming you haven't deliberately falsified something. No different that getting a large increase in income and having to pay additional on that amount.

There is new IRS site for implementation regs Affordable Care Act (ACA) Tax Provisions

Similar to estimated tax payments, sounds like you should report changes to your exchange and they make adjustments

Change in Circumstances: If you are receiving advance Premium Tax Credits to help pay for your insurance coverage, you should report changes such as income or family size to your marketplace. Reporting changes will help to make sure you are getting the proper amount of assistance
__________________

__________________
rbmrtn is offline   Reply With Quote
Old 08-23-2013, 11:22 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Would they possibly be the same as normal tax underpayment? Seems like if you paid enough estimated/withheld taxes to cover your taxes and the excess subsidy you should be in good shape.
__________________
Animorph is offline   Reply With Quote
Old 08-23-2013, 12:09 PM   #4
Full time employment: Posting here.
 
Join Date: Apr 2006
Posts: 925
Excellent. One less thing to lose sleep over during the planning process.

Thank you very much.
__________________
If there's one thing in my life that's missing; It's the time I spend alone
Sailing on the cool and bright clear waters; There's lots of those friendly people
Showin me ways to go; And I never want to lose your inspiration
CoolChange is offline   Reply With Quote
Old 08-23-2013, 03:34 PM   #5
Dryer sheet aficionado
 
Join Date: Oct 2007
Posts: 37
With an income at 300% poverty level, your subsidy can be quite large depending on your age. For a couple in their early 60's, it can be above $10,000.
__________________
joe8012 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 02:11 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.