Will I actually have to repay our healthcare.gov subsidies? Shocked by our tax bill!

Thanks for explaining, but it still feels incredibly unfair. Is there any flexibility with this at all? Can I negotiate with the IRS or maybe pay it off over time? We just don't have $6,800 sitting around. Also, do you know what the 400% poverty level amount actually is? Like what's the exact dollar amount where the repayment cap stops applying?

The IRS does offer payment plans if you can't pay the full amount immediately. You can apply for a short-term payment plan (120 days or less) online with no setup fee, or a longer-term installment agreement with a modest setup fee. Interest and penalties will continue to accrue, but at least you can spread out the payments to make them more manageable. For 2023, the 400% FPL for a family of two was about $73,240. Since you mentioned making around $87,000, you're unfortunately above that threshold, which is why you're facing the full repayment. The system is designed this way to prevent higher-income households from receiving subsidies, but it can certainly create difficult situations when income unexpectedly increases.

Wait, this sounds interesting. How exactly does taxr.ai work with healthcare subsidies? Does it just review your tax forms or does it actually help you file? I'm in a similar situation but haven't filed my extended return yet.

I'm skeptical. What specific income types aren't counted in MAGI for ACA purposes? Everything I've read says MAGI for ACA is basically the same as AGI plus a few add-backs. Sounds like you're confusing something or got bad advice.

The tool actually analyzes your tax documents and transcripts to identify potential issues or opportunities specific to your situation. It doesn't file for you, but gives you detailed guidance that you can take to your tax preparer. In my case, it specifically flagged certain deductions and income classifications that affected my MAGI calculation for ACA purposes. For the specific income types, you're right that ACA MAGI is similar to regular AGI with some modifications, but there are nuances. For example, certain business expenses, qualified retirement contributions, and student loan interest can reduce your MAGI. In my case, I had some self-employment income with legitimate business expenses that weren't being properly deducted before calculating my MAGI.

How does this actually work? I don't understand how they can get through when nobody else can. I've tried calling the IRS multiple times and always hang up after being on hold forever.

This sounds like a complete scam. There's no way some random service can magically connect you to the IRS faster than anyone else. They're probably just charging you for something you could do yourself for free if you were patient enough.

They use an automated system that continually redials and navigates the IRS phone tree until it gets through. Think of it like having a robot assistant making the call for you, navigating all the prompts, waiting on hold, and then only bringing you in when there's actually a human ready to talk. It saves you from having to personally wait on hold for hours. They don't have any special access to the IRS - they're just using technology to handle the frustrating phone process. I was skeptical too, but after spending literally days trying to get through myself, I was desperate enough to try. It's not about patience - I had already spent over 10 hours on hold across multiple days before giving up and trying this service.

This is exactly what I was going to suggest. Look at HSA contributions too - you can actually make those up until the tax filing deadline (including extensions!) and they'll count for the previous year. Could help reduce MAGI enough to hit that cap threshold.

That's really helpful, thank you! We definitely have some business expenses from our side gigs that we might not have fully accounted for. And I had no idea about being able to make HSA contributions even now for last year. Will definitely look into all of this before we finalize our return!

Is this really true? I thought the marketplace subsidies ARE the advance payment of the Premium Tax Credit. They're the same thing, just paid in advance based on your estimate. Am I missing something?

You're absolutely right - the marketplace subsidies are advance payments of the Premium Tax Credit. I think Giovanni might be confusing some terminology here. The reconciliation happens on Form 8962 where you compare what you received in advance versus what you were actually eligible for based on final income. However, the "reasonable cause" exception for penalties is still valid advice. If you can demonstrate that the income increase was unexpected and not due to negligence, you might avoid accuracy-related penalties. But it won't change the actual subsidy repayment amount - that's based purely on the income thresholds.