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View Diary: My Personal Experience with the Marketplace, Part 1 (10 comments)

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  •  Probably like estimating taxes... (5+ / 0-)
    Recommended by:
    Vatexia, housesella, annan, Lujane, vernonbc

    As self-employed, I have to send estimated taxes in four times a year. Each year, I can choose to send either what I think I'll owe or the exact amount I owed the prior year. If I end up making more money the next year, I do not receive a penalty for underestimating as long as it's the same as the previous year. However, I do have to send the difference in with my next tax filing in April. If I make less, I get to apply the overage to the following year's taxes (or get a refund).

    My guess is that the ACA will work in a similar way. They certainly aren't going to fine people for underestimating in the first year, but you will definitely have to make up the difference in the cost of premiums if you underestimate. That's why the IRS is handling the money...they know how to manage this.

    Self-employed people have to do this with taxes every year. The bad news is that if you make significantly more than you expected, you have to come up with the difference. The good news is that you made significantly more so you should have the money to pay it. I always put a percentage of my gross income into a dedicated savings account to pay my taxes. I will include extra for healthcare premiums in 2014. I don't think it will be very different.

    Never interrupt your enemy when he is making a mistake.

    by Libertina on Fri Oct 18, 2013 at 06:45:41 PM PDT

    [ Parent ]

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