Determining your Household income under the Affordable Care Act

 

In order to determine your household income, you first need to figure out your Modified Adjusted Gross Income (MAGI). All states are now required to use modified adjusted gross income to determine eligibility for the subsidy under the Affordable Care Act. The Affordable Care Act also dictates that all states use modified adjusted gross income to determine eligibility for Medicaid and CHIP.  Assets are not considered when determining your eligibility.

To calculate your modified adjusted gross income, you’ll first need to determine what your adjusted gross income is. Adjusted gross income is defined as your gross income minus adjustments to income. If you take a look at line 37 below, you can see how adjusted gross income is calculated on a 2012 income tax return form.

 

Income

 

 

Attach Form(s) W-2 here. Also attach Forms W-2G and

1099-R if tax was withheld.

 

 

If you did not get a W-2,

see instructions.

 

 

Enclose, but do not attach, any payment. Also, please use Form 1040-V.

7      Wages, salaries, tips, etc. Attach Form(s) W-2   .    .    .    .    .    .    .    .    .    .    .    .

8a    Taxable interest. Attach Schedule B if required   .    .    .    .    .    .    .    .    .    .    .    .

7

 

 

8a

 

 

b    Tax-exempt interest. Do not include on line 8a  .    .    .

8b

 

 

 

 

 

9a    Ordinary dividends. Attach Schedule B if required          .    .    .    .    .    .    .    .    .    .    .

9a

b    Qualified dividends .    .    .    .    .    .    .    .    .    .    .

9b

 

 

 

 

 

10      Taxable refunds, credits, or offsets of state and local income taxes    .    .    .    .    .    .

11      Alimony received  .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .

12      Business income or (loss). Attach Schedule C or C-EZ  .    .    .    .    .    .    .    .    .    .

13      Capital gain or (loss). Attach Schedule D if required. If not required, check here ?

14      Other gains or (losses). Attach Form 4797 .    .    .    .    .    .    .    .    .    .    .    .    .    .

15a    IRA distributions    .                                                           b Taxable amount    .    .    .

16a    Pensions and annuities                                                        b Taxable amount    .    .    .

17      Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E

18      Farm income or (loss). Attach Schedule F .    .    .    .    .    .    .    .    .    .    .    .    .    .

19      Unemployment compensation   .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .

20a    Social security benefits

21      Other income. List type and amount

22      Combine the amounts in the far right column for lines 7 through 21. This is your total income ?

10

11

 

 

12

 

 

13

 

 

14

 

 

15b

 

 

16b

 

 

17

 

 

18

 

 

19

 

 

20b

 

 

21

 

 

22

 

 

·        

 

 

Adjusted Gross Income

23      Educator expenses    .    .    .    .    .    .    .    .    .    .

24      Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ

25      Health savings account deduction. Attach Form 8889   .

26      Moving expenses. Attach Form 3903   .    .    .    .    .    .

27      Deductible part of self-employment tax. Attach Schedule SE .

28      Self-employed SEP, SIMPLE, and qualified plans .    .

29      Self-employed health insurance deduction        .    .    .    .

30      Penalty on early withdrawal of savings .    .    .    .    .    .

31a    Alimony paid   Recipient’s SSN ?

32      IRA deduction  .    .    .    .    .    .    .    .    .    .    .    .    .

33      Student loan interest deduction .    .    .    .    .    .    .    .

34      Tuition and fees. Attach Form 8917 .    .    .    .    .    .    .

35      Domestic production activities deduction. Attach Form 8903

23

 

 

 

 

 

 

 

24

 

 

 

25

 

 

26

 

 

27

 

 

28

 

 

29

 

 

30

 

 

31a

 

 

32

 

 

33

 

 

34

 

 

35

 

 

36      Add lines 23 through 35  .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .    .

37      Subtract line 36 from line 22. This is your adjusted gross income                          .    .    .    .    .                                                                                                            ?

36

37

 

 

 

 

 

Now, to calculate your modified adjusted gross income, we just need to add up your adjusted gross income, any foreign income, tax exempt interest, and Social Security benefits.

Basically, modified adjusted gross income = Adjusted gross income + foreign income + tax exempt interest +Social Security benefits

 

            Now that we’ve determined your modified adjusted gross income, we can now calculate your household income. All you need to do is take your modified adjusted gross income and add the modified adjusted gross income for every individual in your family that filed a tax return and was claimed as a personal exemption under section 151 for the taxable year. If you are unsure of who was claimed as a personal exemption, refer to the following section of your tax return:

 

 


 

 

--

 

Michael Acosta

 

Michael.acosta@acostainsurance.com

 

305-265-8118

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