income

Tax Day Is Coming! Here's What You Need

April 15th falls on a Sunday, and Washington DC celebrates Emancipation Day (the day Lincoln freed the slaves) on Monday, April 16th so Tax Day is Tuesday, April 17, 2018. 

April 15th falls on a Sunday, and Washington DC celebrates Emancipation Day (the day Lincoln freed the slaves) on Monday, April 16th so Tax Day is Tuesday, April 17, 2018. 

In 2017, you were required to have insurance all year unless you qualified for an exemption. You might have gotten your insurance from an employer, from public insurance (Medicaid, Medicare, VA coverage), or from private insurance (purchased separately or from the Marketplace). And now your 2017 taxes are due. Don't get confused, get organized!

 

Forms, Forms, Forms...

If you got insurance from an employer or public insurance, you should have gotten 1095-B or 1095-C forms from them. You can file your taxes without those forms, though, because they are also reporting to the IRS.

If you got insurance through the Marketplace, you need the 1095-A form. You can find that online in your healthcare.gov account. With the information you have on the 1095-A form, you can reconcile your tax credits, which you do using IRS Form 8962.

Find out more about how to reconcile tax credits with this handy explanation.

If you got private insurance without tax credits, your insurer should have your 1095-A, and you don't file for tax credits. You still have to submit the 1095-A as proof you had insurance.

 

I Didn't Have Insurance. Can I Get An Exemption?

If you didn't have insurance for the whole year, you might have qualified for an exemption. Common exemptions would be: 

  • you were uncovered for less than 3 months (perhaps you moved or switched jobs)
  • cost of insurance for the household was more than 8% of your income and was unaffordable
  • your income is below the tax-filing threshold 
  • you were living out of the country for all or part of the year.

There are other exemptions, too. You file for an exemption using IRS Form 8965. Find out more below. 

 

No Exemption?  No Insurance?  Pay a penalty.

If you don't qualify for an exemption, and you didn't have insurance, you might need to pay a penalty. For the 2017 plan year, the fee is calculated 2 different ways — as a percentage of your yearly household income, and per person. You’ll pay whichever is higher.

1. Percentage of income: 2.5% of yearly household income. The maximum is the total yearly premium for the national average price of a Bronze plan sold through the Marketplace.

or

2. Per person per year: $695 per adult or $347.50 per child under 18. The maximum is $2,085 per household. 

 

A Household Is Made Up Of Individuals

Familycolorful.png

NOTE: Think about each person in the household separately! In some cases, you may have one person on the Marketplace or with employer insurance, one person with an exemption based on affordability, and a child on Medicaid or MIChild.

If you finish your taxes, you realize you will owe some money, and you don't want that to happen again, come visit us at 555 Towner, Ypsilanti, MI M-F 9-4 p.m., or call us at 734-544-3030, for a free consultation.

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What Is The Maximum I Can Make For...?

The Department of Health and Human Services begins using revised Federal Poverty Level Guidelines each April.  Many federally and state funded programs use the income guidelines to determine eligibility for programs and services.  Healthcare subsidy programs, Medicaid and Medicare all use the guidelines in their calculations.  The Federal Poverty Guidelines can be found here.

The chart below is what we use at the Washtenaw Health Plan to help people figure out what health care coverage is best for themselves and their family.  Our chart includes a 5% disregard.  We use the chart for determining eligibility for MAGI Medicaid. (What is MAGI?)

This is the document which includes disregards we use to determine eligibility for Medicaid, Marketplace tax credits and cost sharing, and other programs.   pdf

This is the document which includes disregards we use to determine eligibility for Medicaid, Marketplace tax credits and cost sharing, and other programs.  pdf

Our website has been updated with the new numbers.  Maybe you are very close to the edge of the income limit for MIChild or you need to check the income limit because you have a new baby.  Both Medicaid and MIChild have been updated.  Not sure where to go? Start Here

Many other programs use the Federal Poverty Guidelines as a baseline for their programs including:

Free and Reduced School Lunch Program

MOMS Medicaid is for pregnant women who are not eligible for full Medicaid because of their immigration status. 

Pregnancy Medicaid

WIC (Women, Infants and Children Supplemental Nutrition Program) provides food, nutrition counseling, and breastfeeding support to mothers and young children. 

Hospital charity care and financial assistance including M-Support and McAuley Support

Medicare/Medicaid programs help low-income Medicare recipients pay their health care costs. 

And many more! 

If you have questions, contact the Washtenaw Health Plan.  734-544-3030 or walk-in Monday through Friday from 9am - 4pm at 555 Towner St. in Ypsilanti. 

-Meredith Buhalis 

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Deductions: "Modifying" Your Adjusted Gross Income Can Save You Money

The Gift Of "MAGI": What Is That?

Adjusted Gross Income is your annual income, as defined by the IRS. If you file taxes using the 1040, you will find it on Line 37. [It is line 4 on the 1040EZ and line 21 on a 1040A.]

For purposes of applying for health care--both Marketplace and Medicaid--and for assessing whether or not health coverage is affordable--the federal government uses "Modified" Adjusted Gross Income, fondly referred to by those of us in "the biz" as MAGI.

*Do you know the story of The Gift of the MAGI?   Pronunciation /ˈmeɪˌdʒaɪ/.

What Gets Modified In Order To Get To A Modified Adjusted Gross Income? Add Backs AND Deductions 

Income includes everything on the list below. More common items are in bold.

  • Wages, Salaries, tips, etc.
  • Taxable interest
  • Taxable amount of pension, annuity, or IRA distributions and social Security benefits
  • Business income, farm income capital gain, other gains (or loss)
  • Unemployment compensation
  • Ordinary dividends
  • Alimony received
  • Rental real estate, royalties, partnerships, S corporations, trusts, etc.
  • Taxable refunds, credits, or offsets of state and local income taxes
  • Other income

This list is from the UC Berkeley Labor Center MAGI handout.

Add Backs

There are a few things you need to "add back" as income--the most common of those is non-taxable social security benefits. Other possible add backs include tax-exempt interest and foreign earned income for Americans living abroad.

Deductions

If you do a Marketplace or Medicaid application, after you are asked about your income, you are asked if you have any deductions such as alimony or student loan interest. The actual list of potential deductions is quite a bit longer, and might make a difference for you. 

Here is the list. More common items are in bold.

  • Educator expenses
  • Certain business expenses of reservists, performing artists, and fee-basis government officials.
  • Health savings account deduction
  • Moving expenses
  • Deductible part of self-employment tax
  • Self-employed SEP, SIMPLE, and qualified plans
  • Self-employed health insurance deduction
  • Penalty on early withdrawal of savings
  • Alimony paid
  • IRA deduction
  • Student loan interest deduction
  • Tuition and fees
  • Domestic production activities deduction

What This Means

On the Marketplace, cost-sharing goes up to 250% of the poverty level (or $60,750 for a family of 4) and tax credit subsidies go up to 400% of the poverty level (or $97,200 for a family of 4). In some cases, putting money in an IRA, paying tuition, or setting up a health savings account can make your MODIFIED Adjusted Gross Income lower, and you could qualify for more benefits. [Note: Not all Marketplace plans allow the use of health savings accounts, but some of them do.]

Of course, we're not tax experts--so you might want to check with yours!

Resources:

UC Berkeley Labor Center MAGI handout

Advocate's Guide to MAGI from the National Health Law Program. 

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¡Necesito Ayuda! Trabajo por mi propia cuenta, ¿cómo reporto ingresos para Medicaid o el Mercado de Salud?

¿Sabía que en el año 2014, 10% de personas empleadas en Estados Unidos trabajan por su propia cuenta?  Si usted trabaja por su propia cuenta, es mucho más probable que usted va a necesitar un seguro de salud a través del mercado o Medicaid.

 

Si usted tiene su propio negocio, o si trabaja como contratista para otra persona (usted recibe el documento 1099 al fin del año), reportar su ingreso es un poco (¡pero solamente un poco!) más complicado que si tuviera un sueldo fijo. Y debido a que es un poco más complicado, algunas personas evitan solicitar cobertura médica. Dado que la cobertura de salud es esencial (¡y por mandato!), aquí hay algunas sugerencias de cómo puede reportar sus ingresos.

Lo que queremos decir con la palabra INGRESOS

Cuando trabajamos con una persona que recibe un sueldo fijo, les decimos que tenemos que mirar el ingreso "bruto”. El ingreso bruto es el ingreso antes de sacar impuestos.

Digamos que usted trabaja a tiempo completo (40 horas a la semana) a $10/hora.

Su ingreso bruto cada semana es 40 horas x $ 10 / hora, o $ 400 por semana. Hay más de 4 semanas en un mes (¡no en febrero!), así que su ingreso bruto mensual en realidad es:

$ 400 (por semana) x 4.3 (semanas en el mes) = $ 1720 / mes

Este monto podría ser muy diferente de su ingreso "neto." El ingreso neto es el dinero que recibe después de impuestos. Así que puede estar "ganando" $ 1720 / mes, pero usted dice, "¡Pero sólo llevo a casa $1300!" Si es verdad, pero ese es su ingreso "neto."

Cuando trabaja por su propia cuenta, es un poco diferente. Usted es responsable de pagar sus propios impuestos, el pago de sus suministros de oficina, gastos de kilometraje, etc. Así que si usted es un carpintero, es posible que tenga gastos de materiales (madera, clavos), el equipo, el kilometraje para llegar al trabajo, incluso el pago de un empleado o ayudante. Así que si usted está manejando su propio negocio, todos los gastos correspondientes al funcionamiento de su negocio se quitan de su ingreso.  En este caso el gobierno mira el ingreso "bruto" de su negocio como sus ingresos menos sus gastos.

¡El truco es que usted tiene que mantener un registro de sus gastos!

 

1. CONTABILIDAD MES POR MES

La idea detrás de esto es simple, y facilita el proceso de reportar ingresos anualmente. Usando un libro de contabilidad, una hoja de cálculo, o una aplicación en su teléfono, mantiene control sobre todos sus ingresos.  

Por ejemplo, si usted tiene un negocio de limpieza, puede hacer una lista de sus ingresos cada mes de la siguiente forma:

Ingreso de Enero / Gastos del negocio de limpieza

Ingreso de Enero / Gastos del negocio de limpieza

INGRESO TOTAL:  $1800

GASTOS DE NEGOCIOS $ 260.25

JUNTANDO EL INGRESO BRUTO / INGRESO DEL NEGOCIO= $ 1.540

INGRESO MENSUAL= $1,540

ESTIMACION DE SU INGRESO ANUAL (si trabaja todo el año) SERIA $1,540 X 12 = $ 18,480

 

2.  REPORTANDO ANUALMENTE (IMPUESTOS)

Si reporta mes a mes, al final del año puede sumar todos los meses y tendrá su informe anual, listo para usar cuando declare sus impuestos anuales.

Si no cree que su ingreso cambia mucho ano tras ano (está haciendo el mismo tipo de trabajo, y se espera hacer la misma cantidad de dinero), puede utilizar sus impuestos como prueba de sus ingresos, y será aceptado como prueba de ingresos en el mercado de seguros médicos y Medicaid. Todo lo que necesita es la primera página de su declaración de impuestos, lo que demuestra su ingreso bruto ajustado.

SU 2015 AGI = $ 18,750

ESTIMACION de 2016 INGRESO ANUAL = $ 18,750

ESTIMACION de ingresos mensuales del 2016 es $ 18.750 / 12 = $ 1,562.50

(Si su ingreso es irregular porque trabaja ciertos meses y otros meses no, su ingreso anual puede demonstrar su trabajo mejor que el ingreso mensual).

NOTA: Si piensa que su ingreso va a cambiar mucho - por ejemplo, debido a que su negocio está prosperando o porque ha perdido varios clientes - entonces le conviene usar su estado de cuenta mensual como prueba de ingresos. Mientras que su ingreso aumente, puede esperar pagar más por su seguro médico. (Sin embargo, consulte con un contador para ver en qué condiciones puede deducir la totalidad o una parte).

Pasar de un trabajo corporativo de muchos anos a iniciar mi propio negocio y ser soltero, y tener una manera fácil de obtener un seguro de salud que puedo solventar ha sido increíblemente útil. Y como mi negocio crece y se vuelve más próspero, estoy pagando más por el seguro. Tiene perfecto sentido para mí. Además, algo así como Obamacare hubiera ayudado a mi madre (hace 25 años) cuando ella perdió su seguro después de que mi padre falleció, su cobertura COBRA terminó, y ella tenía cáncer.
— Terapeuta Autónomo

Recursos para los que trabajan por su propia cuenta.

No se ponga en un riesgo por no tener seguro médico, y tenga que pagar la multa por la razón de que se siente intimidado por mantener contabilidad de sus ingresos y gastos.

Aquí están algunos recursos útiles!

USA.GOV: Iniciar su propio negocio

IRS.GOV: Declarar y Pagar impuestos de su negocio

Administración de Pequeños Negocios

TheSelfEmployed.com

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Help! How Do I Report Self-Employment Income for Medicaid or the Marketplace?

En espanol - ¡Necesito Ayuda! ¿Trabajo por mi propia cuenta, cómo reporto ingresos para Medicaid o el Mercado de Salud?

Did you know that in 2014, 10% of all workers were self-employed? And IF you are self-employed, it is much more likely that you will need health insurance through the Marketplace or Medicaid.

If you have your own business, or you work as a contractor for somebody else (you get a 1099 at the end of the year), then reporting your income is a bit (but only a bit!) more complicated than if you get a regular paycheck. And because it is a bit more complicated, it keeps some people from applying for health coverage at all. Since health coverage is essential (and mandated!), here are some suggestions for how you can report your income.

What We Mean By Income

When we work with someone who gets a regular paycheck, we tell them that we have to look at "gross" income. Gross income is your income before you take out taxes.

Let's say you work full-time at $10/hour.

Your gross income every week is going to be 40 hours x $10/hour, or $400 per week. There are more than 4 weeks in a month (except February!), so your monthly gross income is actually:

$400 (per week)  x 4.3 (weeks in the month) = $1720/month

This could be quite different from your "NET" income, which is after taxes are taken out. So you might be "making" $1720/month, but you say, "But I only bring home $1300!" True, but that is your "net" income.

When you are self-employed, it's quite a bit different. You are responsible for paying your own taxes, paying for your office supplies, mileage expenses, etc. So if you are a carpenter, you might have expenses for materials (wood, nails), equipment, mileage to get to a job, possibly even paying a helper. Since you are running your own small business, all of this gets taken out as the cost of running your own business. In this case, the government thinks of your business's "gross" income as your income minus your expenses.

The trick is, you have to keep track of that!

1. Month by Month Accounting

The idea behind this is simple, and it actually makes annual reporting easier. Using a hand ledger, a spreadsheet, or an app on your phone, you keep track of all of your income. 

So, for example, if you run a cleaning business, you might list your income every month like this:

January Income/Expense Statement for a cleaning business

January Income/Expense Statement for a cleaning business

Total Income $1,800

Minus Expenses $260.25

equals Gross/Business income $1,540

Monthly income = $1,540

Estimated Annual income (if you work all year) will be       $1,540 x 12 = $18,480

2. Annual Reporting (Taxes)

If you do month by month reporting, then at the end of the year you can add up all of your months and you'll have your annual report, ready to use for filing your taxes.

If you don't expect your income to change much year to year (you are doing the same type of work, and you expect to make about the same amount of money), you can use your taxes as proof of your income, and will be accepted as proof of income with both the Marketplace and Medicaid. All you need is the front page of your taxes, which shows your adjusted gross income (AGI).

your 2015 AGI = $18,750

Estimated 2016 Annual income = $18,750

Estimated 2016 monthly income is $18,750/12 = $1,562.50

(If your income is irregular, because you work a lot in some months and not at all in others, your annual income may represent your work better than monthly income.)

NOTE: If you DO think your income will change a lot--for instance, because your business is booming or because you have lost several clients--then you are better off using your monthly statement as proof of income. As your income goes up, you can expect to pay more for your health care. (But check with an accountant to see under what conditions you can deduct all or part of it.)

Going from a corporate job for many years to starting my own business, and being single, having an easy way to get health insurance that I can afford, has been incredibly helpful. And as my business grows and becomes more profitable, I’m paying more for insurance. Makes perfect sense to me. Additionally, something like Obamacare would have helped my mother out so significantly (25 years ago) when she lost her insurance after my father died, his COBRA ended, and she had cancer.
— Self-employed therapist

Resources for the Self-Employed

Don't get stuck, and have no insurance, and have to pay the health care penalty, just because you were intimidated by keeping records of your income and expenses.

Here are some helpful resources!

USA.GOV: Starting Your Own Business

IRS.GOV: Filing and Paying Business Taxes

Small Business Administration

TheSelfEmployed.com

 

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It's Tax Time! Get (Free) Help!

People need help filing their taxes for many reasons. Whatever the reason, there are some great resources for getting help filing your taxes.  

Remember that the Affordable Care Act requires everyone to have health care coverage for at least 9 months of the year. You may have received from 1095 from your employer, the state of Michigan or the Marketplace.  Make sure to add this document to the papers you bring to the tax preparation service. 

Here is a list of documents to bring with you to any tax preparation appointment or gather before you start your tax return online:

  • Social Security Card for all family members, picture ID for all adults
  • W-2 forms for all jobs worked in the previous year
  • Proof of rent or mortgage and property tax payments
  • Childcare provider's name, address and federal tax ID number
  • Blank, voided check or deposit slip to set up direct deposit of refund
  • 1099 forms for other income, including unemployment or contract work
  • Supplemental Security Income (SSI) letter
  • Copy of your last year's return ( if available)
  • Last year's heating bills (11/2014-11/2015)
  • Any other tax-related letters or documents

 

VITA - United Way of Washtenaw county

FREE income tax preparation assistance from the United Way of Washtenaw County for residents making up to $53,000.

  • Call 734-677-7235 to schedule an appointment or email vita@uwwashtenaw.org.  Appointments are available Thursdays 5:30-8:30pm 2/4/16 to 4/716 and Saturdays 10am-4pm.  Meet at United Way, 2305 Platt Rd. Ann Arbor, 48104. 
  • Call 734-428-7722 to schedule an appointment at Manchester Community Resource Center, 410 City Rd. Manchester, 48158.  Appointments are available Mondays 10am-3pm 2/1/16 to 3/21/16. 

Many other areas in Michigan have VITA or other tax assistance--use this link to find help in your area.

MyFreeTaxes.com

Do you use a computer?  Do you have access to the computer?  Does your family make $62,000 or less?  Myfreetaxes.com is a free online service for tax preparation and filing from United Way and H&R Block.  Myfreetaxes.com provides email, live chat and telephone support in English and Spanish.  80% of people who filed using this service finished in less than 1 hour.  

 

AARP Tax Aide

TAX AIDE LOCATOR - FIND AN AGENCY NEAR YOU

AARP Tax Aide offers free tax preparation help to anyone, especially if you’re 50 and older and can’t afford a tax preparation service.  Find a location using the Tax Aide Locator below.  Washtenaw county locations include the Ann Arbor Community center, Milan Senior Center, Saline Area Senior Center, Ypsilanti District Library and more. 

 

Catholic Social Services of Washtenaw County

Limited income senior citizens can call 734-712-0588 to find out more information about how to make an appointment. The program works year-round with community senior centers (Ypsilanti, Chelsea, Dexter, Northfield and Pittsfield Twp.) and senior housing facilities to schedule appointments regarding tax form preparation, Michigan Home Heating Credit, Michigan Homestead Property Tax Credit and Michigan and Federal Tax Returns. 

 

U of M Law School Low Income Taxpayer Clinic (UMLS LITC)

UM Law School  LITC helps clients resolve issues (issues involving <$50,000) with the IRS.  Call 734-936-3535 to see if you are eligible or complete an online client application.

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Filing Taxes and Marketplace Health Insurance - Form 8962

Forms you need to file

Under the Affordable Care Act, everyone needs to have insurance.  When you file your taxes, you prove that you had insurance by submitting a form.  If you were enrolled in health insurance during 2015, you will receive one or more copies of a 1095-A, B or C.  (Read about those forms here.)  Your 1095 forms will be mailed in early February.  You can also find your 1095-A in your Marketplace account in your messages.  These forms are filled out by the Marketplace, your employer, or Medicaid. Don't fill it out yourself--if you think the information is wrong, you can get a corrected form.  

keepcalmtaxtime

If you take your tax information to a tax preparer, bring those forms with you.  If you prepare your own tax forms, you will need those forms to file your taxes. 

If you had employer coverage or coverage through public insurance like Medicaid or Medicare, you simply provide those forms when you file your taxes. If you got health coverage through the Marketplace, it is a different story.

Reconciling Tax Credits

If you received tax credits to help pay your health insurance premiums, then you paid part of your health insurance costs and the government paid part of your health insurance costs.


At the end of the year you reconcile your tax credits when you file your taxes. You will need Form 8962 and your 1095-A.  Remember when you enrolled in Marketplace insurance, you agreed to file taxes and reconcile the income reported on your application with your actual income on your tax return.  

 

As can be seen in the example above,  you get Advance Premium Tax Credits (APTCs) when you do your application for health insurance on the Marketplace. At the end of the year, you take a look back. If you estimated correctly on your income, your Advance Premium Tax Credits turn into Premium Tax Credits, and you don't owe anything, but you also don't get anything back. If you estimated low (and end up making more money), you may owe back some of those tax credits. If you estimated your income high (and don't do as well financially), you may get some additional Premium Tax Credits. This reconciliation, as it is called, happens with the help of Form 8962.

You only need to reconcile tax credits for the months where you had APTCs. If, for instance, you had employer coverage the first half of the year, and Marketplace coverage the second half of the year, you will indicate that on your taxes, but you will only reconcile your APTCs for the second half of the year.

One more caveat--if you don't reconcile your tax credits, then you won't be able to get Advance Premium Tax Credits on the Marketplace next year.

Coming soon: How to get tax help

--M. Buhalis and R. Kraut

 

 

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Minimum Wage is Rising! Will Your Insurance Options Change? Find Out About Special Enrollment Period Magic!

Friday, January 1, 2016, Michigan's minimum wage rose from $8.15/hour to $8.50/hour. Next January, 2017, it will go up to $8.90/hour, and the year after that, it will rise to $9.25/hour.

Minimum wage laws across the U.S. Source: US Department of Labor

Minimum wage laws across the U.S. Source: US Department of Labor

If you are a person struggling to get by on a minimum wage job, this is excellent news--but for single adults working close to 40 hours a week, it may mean that you are no longer going to be eligible for Medicaid. Currently, the income cap for a single person for Medicaid is $1,354/month (gross income), or $16,243/year. 

At $8.15/hour, a minimum wage worker would hit the Medicaid income cap if they averaged over 38.5 hours/week. But at $8.50/hour, that same worker could only work 37 hours/week, on average.

Average Weekly Hours A Single Person Could Work And Be Eligible for the Healthy Michigan Plan

In 2015 dollars, the maximum income for a single adult to qualify for the Healthy Michigan Plan is $1354/month or $16,243/year.

If you have had Medicaid, and you are getting a raise (for any reason--perhaps a promotion?!), then be prepared that you may no longer be eligible for Medicaid.  You may be over income. [For a fuller explanation of income guidelines for various types of Medicaid, visit this page.]

If you are going to be over income for Medicaid, don't panic. 

First of all, it's possible that you aren't over income for Medicaid at all. Under Michigan Medicaid policy, income can be calculated on a monthly or annual basis. If you work a job where you work a lot of hours at certain times of year, and much less at other times of the year (say you are a lifeguard or a teacher's aide), you may be able to use the annual assessment of income, which allows you to even out high-income and low-income parts of the year. 

Events that will qualify you for a Special Enrollment Period. &nbsp;

Events that will qualify you for a Special Enrollment Period. 

But if you are over income for Medicaid, then most of the time you will be eligible either for the Marketplace or for employer insurance. What, you say? But it's March now, and Open Enrollment ended in January?

When Medicaid ends, you will have 60 days to qualify for a Special Enrollment Period through the Marketplace or at least 30 days through an employer's insurance. So Keep Calm, and Enroll On!  Seriously, if you need some guidance, give us a call year-round at (734) 544-3030.

--R. Kraut

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Self-Employed? The Marketplace and Medicaid are Open for You!

carpenter

Let's say that you have a small carpentry business, or you run a day care. Most of the time it's just you, occasionally you pay a helper. Your business is really too small to get a health insurance plan through the business. 

But...

Depending on your income, it is very likely that you can choose an affordable plan on the Marketplace. If your income is on the low side, you may even qualify for Medicaid. Medicaid income guideline information.

When we talk about INCOME for people who are SELF-EMPLOYED, we are really talking about NET PROFIT. 

incomeminusexpenseequalsnetincome

So--let's say that you get paid $10,000/month for a contract, but your expenses are $5,000/month. Your NET PROFIT is $5,000/month. If that is steady year-round, then you would have an annual income of $60,000. But for many people who are self-employed, contracts have their highs and lows. It could be that you make a net profit of $5,000/month five months out of the year. The rest of the time, you barely break even. That would give you an annual income of $25,000.

AGILine37onTaxform

For most self-employed people, your adjusted gross income (found on line 37 of the front page of your 1040 taxes) can be used to qualify for either the Marketplace or Medicaid. You can use last year's information to prove your income, unless you have some reason to think that your income this year will be significantly different from last year.

Maybe you won (or lost) a big contract. In that case, your income/expense statement from the last few months will be your best guide. [Note: Your income/expense statement does not have to be anything fancy! An Excel spreadsheet, or even a handwritten accounting, will work. And of course, if you prefer, there are smartphone apps that will help you.]

Last, but not least--if one person in a household has an offer of employer insurance, that can also affect eligibility. Read more about employer offered insurance.

whyhealthinsurance

In fact, the biggest obstacles for self-employed people getting insurance through Medicaid or the Marketplace are often these two things:

1. They didn't know they could qualify.

fileyourtaxes

2. They haven't done last year's taxes. Doing last year's taxes isn't a requirement for getting health coverage, but it does make things a lot easier. However--if you do get a Marketplace plan, you will need to do your taxes for the following year to reconcile your Advanced Premium Tax Credits. 

If you think you will qualify for the Marketplace (healthcare.gov), you must sign up during Open Enrollment, November 1, 2015 to January 31, 2016.  Medicaid enrollment is always open, you can apply anytime at https://www.mibridges.michigan.gov/.  If you are not sure, please call a nonprofit agency to help you.  Find one close to you and make an appointment

NOTE: Is your business a bit bigger? Check out the SHOP Marketplace to see if you can offer insurance to everyone who works for you!

--R. Kraut

 

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