Thursday, November 20, 2014

Reader asks about estimating income

Shortly before open enrollment began Saturday,  a reader who asked to be identified only as Elizabeth logged onto the Blue Cross website to try to estimate the cost of her policy in 2015.  To estimate her subsidy under the Affordable Care Act,  she was asked to enter her modified adjusted gross income.

What,  she wondered,  is that?

I found a one-page explanation of that term created by the University of California Berkeley Labor Center.   And,  the official ACA website,  offers a list of tips on what to include and omit in estimating the income that will be used to calculate 2015 tax credits.

Income estimates and tax credits get complicated
Wages,  salary,  tips,  net business income,  unemployment compensation,  alimony,  Social Security,  investment income and rental income all count toward determining how much aid you can get.

Child support,  gifts,  Supplemental Security Income,  veteran's disability payments,  workers comp and loans don't count.

But the biggest challenge,  it seems to me,  is that you're not reporting what you made this year  but predicting what you will make in 2015.  For people with full-time salaried jobs that may be relatively easy,  but for many others it's not.  As John Murawski of the News & Observer reported last week,  a whole lot of people are about to face up to how good their 2014 estimates were as they prepare their taxes.

At the risk of sounding like a broken record:  When in doubt,  get help.  You can make an appointment for free personal advice from someone trained to navigate the ACA exchange by calling 1-855-733-3711 in North Carolina and 1-888-998-4646 in South Carolina  (I've heard you may get a busy signal,  but that should ease after the first few days.)  Insurance agents and brokers can also help with the exchange.

And remember to check the source of your information.  There are a lot of folks with official-looking websites and mailings trying to sell products,  push agendas and maybe even rip you off.  When I googled the ACA and  "modified adjusted gross income,"  the first link that came up was a detailed explanation on  The page contains a note that it's  "privately owned,"  and if you click around a bit more you'll learn that it's  "run by two guys, we have no ties to any political party or organization and don’t receive funding from anyone."  This unnamed duo may be as unbiased as they repeatedly profess to be and their information may be solid.  But I wouldn't stake my health or money on it.

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