Is there an income threshold where you have to pay back the entire premium tax credit? I heard something about 400% of the federal poverty level but not sure if that's still accurate.

Yes, there is a threshold, but the rules have changed recently. Previously, if your income exceeded 400% of the Federal Poverty Level (FPL), you would have to repay the entire Premium Tax Credit amount. This was often called the "subsidy cliff." However, the American Rescue Plan temporarily eliminated this cliff, and this provision has been extended through 2025. Now, regardless of income, no household is required to pay more than 8.5% of their income toward benchmark marketplace coverage. This means even if your income ends up higher than expected, you're still eligible for some amount of Premium Tax Credit if your insurance premiums exceed 8.5% of your household income.

This! My husband's employer insurance wanted $650/month to add me, but I got a marketplace plan with Premium Tax Credit for $175/month. Just make sure your dad's plan is considered "affordable" for him only - if it is, and it only covers him (not dependents), you and your sister can still qualify for PTCs.

Exactly! The "family glitch" fix that went into effect means that affordability for family members is now calculated separately. So if adding dependents to the employer plan is expensive (which it often is), the dependents may qualify for Premium Tax Credits even if the employee has affordable coverage through work.

Thanks for the suggestion! I'm hesitant to start over with new software since I'm pretty far along in TurboTax, but it might be worth it to avoid mailing. Did you have to manually re-enter everything when you switched to FreeTaxUSA or is there some way to transfer the information?

Unfortunately, you do have to re-enter everything manually when switching between tax software platforms. There's no universal transfer system between different companies. It's definitely a pain, especially if you're already far along in TurboTax. One shortcut though - if you have last year's tax return PDF (even from TurboTax), most software can import some basic information from it like personal details and employer information. You'd still need to enter this year's specific numbers manually, but it saves some time on the setup.

I second this! In my case it was vehicle expenses for my delivery gig. When I changed from "actual expenses" to "standard mileage rate" it suddenly allowed e-filing. The tax amount was basically the same but for some reason one method triggered paper filing and the other didn't.

Can you explain more about these different classes of stock? How exactly would that help with the tax distribution problem? My LLC is thinking about restructuring and this could be useful.

Different classes of stock or membership interests can have different rights and characteristics, including how distributions are treated. For example, some operating agreements specifically define "tax distributions" as mandatory distributions made solely for the purpose of covering tax liabilities, separate from discretionary profit distributions. This doesn't necessarily change the tax treatment at the federal level, but it does provide clarity in the operating agreement about the purpose and handling of these distributions. It can also affect how these distributions are treated for accounting purposes and in any member disputes. For your LLC restructuring, consider having your operating agreement specifically address tax distributions - when they're calculated, how they're calculated (including which tax rate to use), and the timing of payments. This clarity can prevent future disagreements.

In an LLC taxed as an S-Corp, you're mixing up a couple of concepts. For an S-Corp (or LLC taxed as one), you as the owner pay taxes on your share of the company's profits regardless of distributions. The distributions themselves aren't what create the tax liability - the company's profits do. So if your S-Corp makes $100,000 in profits, you'll pay tax on your portion of that $100,000 whether you take distributions or not. Distribution A isn't creating a new tax liability - you already have the tax liability from the profits. Distribution B is just giving you more cash from the company, not creating additional taxable income. This is different from C-Corps where distributions (dividends) themselves are taxable events.

Oh wow, I didn't realize it actually changed the amount! I thought it was just an information field. Now I'm definitely going to file that amendment ASAP. Does that mean I'll owe more when I fix this?

Yes, you'll likely owe the tax difference between your original filing and the corrected amount. Since the legally blind status gives an additional $1,850 to your standard deduction, removing that will increase your taxable income by that amount. The actual tax impact depends on your tax bracket, but if you're in the 10% bracket, it would be about $185 additional tax. If you're in the 12% bracket, around $222. You'll also probably owe some interest on the unpaid amount, but since you're amending quickly, that should be minimal.

Can confirm this is super important! I made a mistake a few years back and didn't realize interest was accruing the whole time. Make the payment when you send in the amendment.

Thanks for pointing this out! My company only does reimbursements after I submit receipts, so it sounds like I'm good. But do you know how advances are treated differently?

Advances can be tricky. If you receive money before incurring the expense, it might be considered an "advance" rather than a reimbursement. If you don't provide adequate documentation afterward or don't return unused funds, the IRS might consider it a non-accountable plan. In a non-accountable plan situation, the advance would be included in your W-2 income, and you'd have to claim any eligible expenses as miscellaneous itemized deductions (which are currently suspended until 2026). Much worse tax treatment than a proper accountable plan reimbursement.

I've been using Expensify for the past year and it's been great. You can snap photos of receipts on the go and it automatically extracts the info. Makes submitting to accounting super easy too.