scrabbler1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 20, 2009
- Messages
- 6,706
I just received my 1095-A form which shows key data I need to complete Form 8962 for my federal income taxes. For me, the key number is the premium for the SLCSP, or Second Lowest Cost Silver Plan.
To help me in my income tax planning, including estimated taxes, I try to predict what the SLCSP will be. In the ACA"s early years, I was able to get pretty close to the actual number, often copying down my county's Silver Plan rates for my family size and determining the second lowest. While that seems straightforward, it didn't work well after a few years. First, my state includes some health services in the basic package which are not required at the federal level. So, the rates shown for SLCSP are overstated. Second, there were other, unknown differences which made my simple calculation unworkable.
The next few years, I went over the ACA MAGI cliff, so I had to return all the ACA subsidy I had received anyway.
But, now that I am back on the subsidy train, the SLCSP matters again. This amount directly determines my actual subsidy on a one-for-one dollar basis. If I guess too high, every dollar I am off (per month) translates into a $12 increase in my taxes.
I can't really use inflation as an indicator for how much the SLCSP will change from one year to the next, because it can come from a different company, one which was granted a smaller rate change.
My quick-and-dirty estimate for the SLCSP in 2022 (using the sorted list) had it rising from just under $600 in 2021 to about $650. However, when I got the 1095-A form the other day, it showed the SLCSP nearly unchanged from 2021. My overestimate of just over $50 per month became an increase in my taxes due of just over $600.
The arrival of the 1095-A form comes after the deadline for making an estimated tax payment for the 4th quarter. I won't be facing any penalties (and I could justify not paying any anyway). But I wouldn't want to overpay estimated taxes and then wait 6-9 months for a refund, either.
As long as I can assure myself of staying in a safe harbor for tax penalties, I'll be fine. But I didn't like the recent, unpleasant surprise of the SLCSP being nearly unchanged from the year before.
To help me in my income tax planning, including estimated taxes, I try to predict what the SLCSP will be. In the ACA"s early years, I was able to get pretty close to the actual number, often copying down my county's Silver Plan rates for my family size and determining the second lowest. While that seems straightforward, it didn't work well after a few years. First, my state includes some health services in the basic package which are not required at the federal level. So, the rates shown for SLCSP are overstated. Second, there were other, unknown differences which made my simple calculation unworkable.
The next few years, I went over the ACA MAGI cliff, so I had to return all the ACA subsidy I had received anyway.
But, now that I am back on the subsidy train, the SLCSP matters again. This amount directly determines my actual subsidy on a one-for-one dollar basis. If I guess too high, every dollar I am off (per month) translates into a $12 increase in my taxes.
I can't really use inflation as an indicator for how much the SLCSP will change from one year to the next, because it can come from a different company, one which was granted a smaller rate change.
My quick-and-dirty estimate for the SLCSP in 2022 (using the sorted list) had it rising from just under $600 in 2021 to about $650. However, when I got the 1095-A form the other day, it showed the SLCSP nearly unchanged from 2021. My overestimate of just over $50 per month became an increase in my taxes due of just over $600.
The arrival of the 1095-A form comes after the deadline for making an estimated tax payment for the 4th quarter. I won't be facing any penalties (and I could justify not paying any anyway). But I wouldn't want to overpay estimated taxes and then wait 6-9 months for a refund, either.
As long as I can assure myself of staying in a safe harbor for tax penalties, I'll be fine. But I didn't like the recent, unpleasant surprise of the SLCSP being nearly unchanged from the year before.