Got health insurance thru the marketplace last year. TurboTax recommended I file form 1040, with Schedule 2 with Form 8962. I did it, but I don't see how it benefits me?

[becka_skygal]

I am not self-employed. I just don't understand the forms. Was I right to use it?

[JulieCo]

Yes, every US tax payer that files an individual tax return files the 1040 form, therefore that would have been your only option.  Schedule 2 is a new form for 2018 and it is where the excess advance premium tax credit repayment amount is recorded on your tax return from Form 8962.  Therefore, the benefit of using the two forms is that your taxes will be filed correctly based upon the information entered. 

[becka_skygal]

Well, not exactly. There are forms 1040EZ and 1040A, which I have used in the past, and filed for free. This time, it was recommended to file form 1040. It doesn't help me to understand the forms to tell me that the reason I should use it is so that I will have filed correctly. I'd like to know how it affected me to file the forms.

It did give me a choice to not file the forms. It asked me what I wanted to do. It recommended that I switch, but I had a choice not to.  Had I not filed them, and stayed with the simpler 1040A or 1040EZ, that's what I'm trying to understand. The amount from Schedule 2 was added to the tax on line 11 of Form 1040. The way it LOOKS to me, is that it increased the tax amount that I owe, then when it subtracted the amount of that that was actually withheld, it turns out to be a larger number for the Amount I Owe.

So - since I was given the choice - would it not have been better for me to not file the Schedule 2 and Form 8962? It seems to me that it would have been better to not file those - that the amount I owe would turn out to be less. But - since I'm not a tax expert, maybe something else happens in a form 1040 that is different than the usual 1040A or 1040EZ, that helped me in another way?

Just trying to understand, since I was given a choice. I assumed it would be to my benefit to do it, but looking it over now, it seems to have not benefited me at all.

[JulieCo]

Just to explain further about the forms, the IRS completely revised the 1040 form in 2018 so there is not any option for1040A or 1040EZ anymore.  Schedule 2 is new because of all the changes the IRS made, but it is just an added schedule to the 1040 form and it does not replace the 1040.   And, yes, Schedule 2 is created when there is an additional amount due on your return for the premium tax credit.  It is adding the excess premium tax credit due related to your health insurance purchased from the marketplace. The excess premium is because you received more of a reduction of your health insurance rates during the year based on the income reported when you signed up for insurance which must have been less than the income reported on your tax return -- so you have to pay the excess premium received back.   If you did not file the 8962 form and Schedule 2, you more than likely you would get notice from the IRS that they require the form, plus the excess premium received to be paid.

[becka_skygal]

Ohhhh.... that makes much more sense to me now. I just had my friend check what his looked like for 2018 and he did get switched to Form 1040. I hadn't heard about that change.

So Marketplace based my payment off last year's earnings, I'm guessing. And I ended up earning more in 2018 than in 2017. So this form makes me pay it back. Got it. I was confused. Now I understand. Thank you!