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Ask the Experts: ACA and Your Annual Income

Q: I am struggling with the Affordable Care Act and how to guess what my income will be for 2015. My 2014 tax return is not completed yet so I am using my 2013 tax return as a guide. Which numbers should I use to determine if I am eligible for a subsidy? Do I use the gross income from my business or do I also count expenses?

A: Your question is a very good one and although it may not help very much, you are certainly not alone in your confusion. The first key point to remember is that the definition for the income for the subsidy calculations includes your entire household income, so starting with your most recent tax return that includes your spouse’s income is a great idea. Start with the amount on Line 37 of your Form 1040, U.S. Individual Income Tax Return witch is titled Adjusted Gross Income. The amount needed for the estimated ACA total is titled Modified Adjusted Gross Income so you may need to make a few additions. If you have any non-taxable interest income such as related to certain municipal bonds, non-taxable social security benefits or any foreign income that was excludable from U.S. tax, those amounts will need to be added back to your adjusted gross income to arrive at your modified adjusted gross income.

Make sure to update any amounts that you know will be different in 2015 than you experienced in 2013 or 2014. Take some extra time and actually put pencil to paper. Determine the effect of any new customers to your business or lost customers. Guess which specific expenses will be lower or higher. And don’t forget other income such as your spouse’s income, investment income, capital gains and losses, etc. The better estimate you can provide on the front end of the application process, the less likely you will be to experience headaches later.

There are a number of good websites that can help you with the amount of the subsidies depending on the size of your household and the modified adjusted income estimate that you provide. The U.S. Centers for Medicare & Medicaid Services maintains a very good website at and the Henry J. Kaiser Family Foundation has a great site with detailed calculators as well at More specifically you can navigate straight to the Kaiser Foundation subsidy calculator. Perhaps the most important thing to remember here is that you are not alone.

Literally 23 million small business owners just like you are facing many of the same challenges as we move forward under the ACA. There are certainly pitfalls within the plan along with lots of benefits as well. We will continue to fight in DC for the voice of the self-employed and will be here to help in any way we can. Bookmark our website at, as well as, the Kaiser Foundation site and the site and you will always be able to find the help you need. Don’t forget that over 70% of all new jobs in this country come from small business owners just like you, so keep up the good work.

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