Client's income was under poverty, but when adding in a dependent's income, it put the family over the limit. the dependent did file on his own. Is that the way I should figure?. in 2014, I figured the insurance penalty, then taxpayer got a letter saying he probably paid too much penalty. was I wrong adding dependent's income into family's income?
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Can you clarify some things? Some of your terminology is either vague or confusing ("under poverty" and "over the limit").
(1) This is for the penalty for not having qualifying health insurance, right?
(2) Does anybody qualify for an exemption to the penalty?
(3) Do they live in a State that has expanded Medicaid?
(4) The dependent is not claiming his own exemption, right?
(5) What is the taxpayer's MAGI?
(6) What is the dependent's MAGI?
(7) What is the dependent's "taxable income" (Line 43 of the 1040)? -
sorry, penalty for not having. husband only one who doesn't have. rest of family has religious exemptions.
live in a state that didn't expand Medicaid
family 0f 8
taxpayers magi 49122
dependents magi 13327 taxable income 7127 did not claim his own exemption, parents didComment
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What you did in 2014 sounds correct. You correctly added the dependent's MAGI to the client's MAGI to calculate the penalty.
The IRS probably just sent an automated notice based on the client's MAGI, and did not account for the dependent's MAGI. I'm sure the IRS still has quite a few 'bugs' to work out of the ACA mess. There is a good chance the taxpayer will receive another notice this years saying they may have paid too much of a penalty.Comment
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this year the dependent is on his own, and the family is still exempt under the poverty exemption. so at least no penalty for 2015.Comment
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