I had my return rejected when I filed because I left off the 1095-A document. This is the Health Insurance Marketplace document.
I received an ACA healthcare plan through a state marketplace since I was unemployed, and our household income was so low last year.
At the end of the year, realizing that we had a huge gap to get us to ~$89K, where the tax rate jumps from 12% to 22%, we made IRA conversions to Roth's, thinking that this would NOT be counted as income since the money never actually touches our day-to-day bank account; the cash stays in "Retirement Space."
However, it IS apparently counted as income. And so the ACA subsidy was clawed back. And we have a HUGE liability.
Is there any work-around to prevent this from being marked as actual "income" and avoid the 1095-A induced heartburn? I am fine paying tax on the conversion - those are the rules - but to have it be counted as money we could use in our daily budgeting is hitting hard.
Any ideas, Tax Experts?
There is no loophole to make the conversion not count as part of your Modified Adjusted Gross Income.
The thing you can do, if you are having to pay back a large amount, is apply for a payment plan to not have to pay it all at once. You can click here to visit the IRS website and apply for a payment plan.
There is no loophole to make the conversion not count as part of your Modified Adjusted Gross Income.
The thing you can do, if you are having to pay back a large amount, is apply for a payment plan to not have to pay it all at once. You can click here to visit the IRS website and apply for a payment plan.