Tax Refunds May Take Huge Hit Due to Health Law Credits


Taxes? Who wants to think about taxes around Labor Day?

But if you count on your tax refund and you're one of the millions getting tax credits to help pay health insurance premiums under the Affordable Care Act (aka Obamacare), it's not too early.

Here's why: If your income for 2014 is going to be higher than you estimated when you applied for health insurance, then complex connections between the health law and taxes can reduce or even eliminate your tax refund next year.

Maybe you're collecting more commissions in an improving economy. Or your spouse got a better job. It could trigger an unwelcome surprise.

The danger is that as your income grows, you don't qualify for as much of a tax credit. Any difference will come out of your tax refund, unless you have promptly reported the changes. MORE

(By Ricardo Alonso-Zaldivar, Associated Press August 24, 2014 via USA Today)