Why is my 1095-A causing me to owe over $1k this year when nothing changed?

4 Thanks for explaining that. Our income did go up a bit this year - my partner got a raise of about $2/hr. Could that small raise really cause such a huge tax bill? We're still struggling paycheck to paycheck even with the raise. Also, how do you figure out what percentage of the poverty level your income is? And is there any way to reduce what we owe now, or are we just stuck with this bill?

15 A $2/hour raise could definitely impact your premium tax credit, especially if it pushed you near or over an important threshold. For a full-time worker, that's roughly $4,000 more annual income, which can significantly affect subsidy calculations. To find your percentage of the Federal Poverty Level (FPL), divide your household MAGI (Modified Adjusted Gross Income) by the FPL for your household size. For 2025 taxes (2024 coverage), you can find the FPL amounts on healthcare.gov or the IRS website. The subsidies gradually decrease as income rises, with cutoffs at various percentage levels. As for reducing what you owe, check if you qualify for any additional deductions or credits you might have missed. You might also consider contributing to a traditional IRA or HSA (if eligible) before the tax filing deadline, which could lower your 2024 MAGI and potentially increase your credit amount. If payment is still difficult, the IRS offers installment plans with reasonable monthly payments.

12 Did you have to pay for the service? I'm already stressed about owing money and don't want to spend more just to figure out why I owe so much. Also, is it secure? I'm always nervous about uploading tax documents online.

19 I'm curious - does it actually help you fix the problem or just tell you why you owe? Because knowing why I owe doesn't help me if I still have to pay the same amount. Can it actually help reduce what you owe or is it just for information?

8 The basic analysis is free, which tells you what's causing your tax issues. That's what I used first to understand my 1095-A problem. They do have paid options for more detailed help, but I didn't need those right away. It's secure - they use bank-level encryption for all document uploads and don't store your data longer than needed. You can delete everything after you're done, which is what I did. It doesn't just explain the problem - it suggests specific actions you can take. In my case, it pointed out that I could still make an IRA contribution for the previous tax year, which lowered my MAGI enough to qualify for a bigger premium tax credit. It also found a home office deduction I missed since I was working remotely. Those two things cut my tax bill by more than half.

3 Wait, how does this even work? I thought it was impossible to get through to the IRS. Do they just keep calling for you or something? And does the IRS actually have the power to change your tax bill over the phone if you explain your situation?

19 I'm skeptical this would help. Even if you get through to the IRS, they'll just tell you that you owe whatever the tax forms say you owe. They can't just decide to give you a break because your situation is difficult. Tax laws are tax laws, and if your income went up, you have to repay the credit. No IRS agent can change that.

6 They use a system that navigates the IRS phone tree and holds your place in line, then calls you when an agent is available. It saves you from having to stay on hold for hours or getting disconnected and starting over. The IRS can't change the tax laws, but they absolutely can help you understand your options. In my case, the agent confirmed I was calculating my premium tax credit correctly but then walked me through setting up a payment plan with very low monthly payments based on my financial situation. They also told me about the possibility of requesting an "offer in compromise" if I truly couldn't pay. Most importantly, they explained what documentation I needed to adjust my marketplace subsidy for the current year so I wouldn't have the same problem again. Getting actual guidance from someone who knows the system is worth so much more than just guessing or stressing.

1 Yeah my partner got a raise from $16 to $18/hr this year. We didn't think it would matter that much since we're still living paycheck to paycheck. No one got new insurance options though - my partner's job doesn't offer benefits. I had no idea that a small raise could cause such a huge change in our taxes. Is there anything we can do now to fix this situation? Or are we just stuck owing this money?

22 That raise is definitely the issue. A $2/hour increase for a full-time job adds about $4,000 to your annual income, which absolutely can push you into a different subsidy bracket or even over the eligibility cliff in some cases. You might still have options to reduce your 2024 taxable income if you haven't filed yet. Contributing to a traditional IRA (not Roth) for 2024 can lower your MAGI, which is the income used to calculate your premium tax credit. You have until the tax filing deadline to make this contribution. Even a small reduction in MAGI might move you back into a better subsidy bracket. Also, for this year (2025), make sure to report your income change to the marketplace so they can adjust your advance premium tax credit appropriately. Being proactive about reporting income changes can help avoid a large tax bill next year.

15 Yes, your state does matter! States that expanded Medicaid under the ACA generally offer coverage to people with incomes up to 138% of the federal poverty level through Medicaid. In those states, marketplace subsidies typically start at 138% FPL. In states that didn't expand Medicaid, there can be a coverage gap where some low-income adults don't qualify for either Medicaid or marketplace subsidies. However, for those who do qualify for marketplace coverage in non-expansion states, subsidies can start at 100% FPL. Additionally, some states run their own marketplace exchanges with slightly different rules than the federal exchange (Healthcare.gov). And a few states (like California) even offer state-specific premium subsidies beyond the federal ones. If you're close to a subsidy cliff, moving between states or a state changing its policies could definitely impact your situation.

Thank you so much for this helpful advice, Carmen. I really appreciate you taking the time to explain everything clearly. The IRA contribution idea is interesting - I had no idea that could help reduce what we owe. Do you know roughly how much we'd need to contribute to make a meaningful difference? We don't have a lot of extra money, but if even a small contribution could help lower our tax bill, it might be worth it. Also, when you mention contacting the marketplace about our income change - should we report the exact current income or try to estimate what we think we'll make for the whole year? I'm worried about getting it wrong again and ending up in the same situation next year. The health issues have been really limiting my ability to work, so knowing there might be additional assistance programs is encouraging. Do you know where I should start looking for those?