It’s open enrollment time on the Health Insurance Marketplace. When you enroll, you need to provide information about your family, your expected household income, and whether anyone you are enrolling is eligible for health insurance coverage from another source such as employer provided coverage. The Marketplace will then use that information to estimate your premium tax credit. Once you know your estimated premium tax credit, you have some choices. Each has its own advantages and disadvantages.

First, you can choose to have some or all of your premium tax credit paid directly to your insurance company in advance. This will lower your monthly out of pocket expense for your health insurance premiums. If you choose this option, you are required to file a tax return even if you would not ordinarily be required to file a tax return. The purpose of this tax return is to reconcile the amount of the advance premium credit paid on your behalf with the amount of your actual premium credit. Form 8962 is used for this reconciliation and must be included with your tax return.

According to the IRS, there are several things you need to be aware of if you choose to have your premium tax credits paid in advance to your health insurance company.

  • If the premium tax credit calculated on your tax return is greater than the advance payments that were made on your behalf during the year, the difference will be added to your refund or will reduce the amount of tax you owe. This amount will be reported in the “Payments” section of your 1040 form.
  • On the other hand, if the premium tax credit calculated on your tax return is less than the advance payments made on your behalf, you will owe additional tax or your refund will be reduced. The extra tax due will be entered on the “Tax and Credits” section of Form 1040.
  • If advance premium tax credits were made on your behalf in 2015 and you do not file an income tax return, you will not be eligible for advance premium tax credits in future years. In other words, you will have to pay the full premium for your health insurance.

Your second option is that you can choose to have none of your premium tax credit paid directly to your insurance company. In this case, you will be required to pay the full amount of the monthly health insurance premiums. When you file your tax return, you will receive all of the premium tax credit returned to you through your tax refund or it may lower the amount of tax you would otherwise owe. For folks who are expecting their income to significantly increase during the year, this may be a valid option for them.

For more information on the Health Insurance Marketplace go to or for questions on the premium tax credit go to

Don’t forget that Small Business Saturday is on November 28, the day after Black Friday. This is the day to celebrate and reward the small businesses for what they do for our communities. By supporting small businesses you will:

  • Probably have a more pleasant experience — smaller crowds, less tired staff.
  • Keep your money working in your community.
  • Support your friends and neighbors, the owners of those small businesses.
  • Experience unique products and services.

In addition, small business owners tend to bend over backwards to provide great customer service. They know their success depends on providing the best experience for their customers.

Happy shopping!

Judith Ackland has more than 26 years of experience in accountancy and financial planning, including seventeen years as a CFO of a diverse business. She started Crystal Financial in 2010 to help a wide array of individuals, families, and business owners better understand their finances and how good financial management could help them achieve their goals. Judith has an MA in Professional Accountancy from the University of Nebraska at Lincoln as well as a Certified Public Accountant Certificate and a Certified Financial Planner designation.

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