I hate "Gross Income" calculations

Hi-
 
My question is for the purpose of calculating income for health care. The health insurance company I had last year went south and I have to choose a new one. The new monthly premium would be about twice what I was paying and that would be a significant burden (i.e. I can't afford it.)
 
I don’t understand why rental income is included in gross income without the ability to deduct expenses. I have a small monthly rental income, but I also have to pay a monthly maintenance fee on that, plus property taxes and repairs. This past year, my rental income after taxes and repairs amounted to almost nothing.
 
I'm self-employed and as a small business owner I’m able to deduct business expenses, so why can’t I deduct rental income expenses as well for the same purpose? See https://www.healthcare.gov/income-and-household-information/income/
No deduction allowed for rental income.
 
I know that there are plenty of startup businesses that report loss of income in the first few or several years, but since the health care premium depends on gross income, how can they afford to pay it?
 
Thanks for letting me unburden myself and for any insights-
 
Susan

It's just a way to raise your income bracket. You can at least deduct expenses for taxes. It's not fair that's for sure. 
My company's health insurance went up 40% starting 2016 even after signing up for a much higher deductible plan. 
It's "bad all over"...

Hi,
 
Please note I have not been 100% up to date on this stuff for 10 years now!
 

Susan G ... My question is for the purpose of calculating income for health care. The health insurance company I had last year went south and I have to choose a new one. The new monthly premium would be about twice what I was paying and that would be a significant burden (i.e. I can't afford it.) I don’t understand why rental income is included in gross income without the ability to deduct expenses.

 
"Rental income", from other properties IS income. But it would be a part of the calculations for the depreciation and other factors relative to that property. It would not be bunched up with everything else.
 
Your own expenses on your house, go on Sch A, usually, for example.
 

Susan G ... I have a small monthly rental income, but I also have to pay a monthly maintenance fee on that, plus property taxes and repairs. This past year, my rental income after taxes and repairs amounted to almost nothing.

 
Depends on how this is setup. If you have a Sch C, and this is a part of it, then this rental income is a part of the depreciation process for the unit, if it applies. If you don't, adding this to the Sch A and other expenses, is probably going to be tough and not as good, I don't think.
 

Susan G  ...
I'm self-employed and as a small business owner I’m able to deduct business expenses, so why can’t I deduct rental income expenses as well for the same purpose? ...

 
During the time of doing psychic shows and the art stuff I was involved with, I used a Schedule C for it all. And you use every single nickel and receipt. You can NOT use that rental income as a part of that "business" unless it was designated as your own work space, for example, and even then the rules on that are very tough because of massive loop holes.  All expenses DIRECTLY related to the business would go to the Sch C.
 
Rental income, would not be a part of your business, unless you are in the rental business. We know you are in the music business, so you would not be able to add that rental income to your "business" as a musician. But you may setup a SECOND Sch C, and that information would go there, but I'm not sure it qualifies as a business, and rules here are also tough.
 
Thus, any "rental income", would, likely, be added to the amounts coming in to your hands, for the calculations on health care.
 
Susan, it may be expensive, but please, talk to a REAL accountant. You will never regret it. You need to know and understand this better so you know how to handle it. You won't if you don't learn this from a real accountant, and I do not mean a book keeper. This will cost you a bit at first, but in the end, you gain, because you learn to channel the energy and information into the right place for proper accounting.

I'd love to have ANY gross income at the moment (I'd even settle for some plain and homely income)... 

clintmartin
...but they said it would all be so much better and cheaper.

They meant for them not us

Moshkito

Mosvalve

clintmartin
...but they said it would all be so much better and cheaper.

They meant for them not us

I disagree. Having helped mom in her office with many returns for many years, the one thing I will say is ... how STUPID many people are, instead of smart with their money. It's not about a "financial" this or that, or anything ... it's about someone that knows the TAX LAW, and has to take exams YEARLY to stay up on these things, so they can do their work properly.
 
Cheaper and supposedly better is a joke in the money business! It translates to ... you're a loser! And NONE of us want that!

I believe they're talking about the current healthcare system and not finances specifically Pedro.

craigb

Moshkito

Mosvalve

clintmartin
...but they said it would all be so much better and cheaper.

They meant for them not us

I disagree. Having helped mom in her office with many returns for many years, the one thing I will say is ... how STUPID many people are, instead of smart with their money. It's not about a "financial" this or that, or anything ... it's about someone that knows the TAX LAW, and has to take exams YEARLY to stay up on these things, so they can do their work properly.
 
Cheaper and supposedly better is a joke in the money business! It translates to ... you're a loser! And NONE of us want that!

I believe they're talking about the current healthcare system and not finances specifically Pedro.

The health care system is another story ... the tax detail that Susan asked about was not quite about the health details. I stuck to the tax information.
 
The whole health thing for me, is too scary for me to even mention it. Just weird and strange and what a trip it has been that I am 65 ... and still here bugging and buffing all of yah! Still have a few benefits, you know the kind ... kick in the butt, cheap quack doctor getting paid, it's never what you feel inside as it's always something else to trap you into diabetes or cancer ... you know the story ...

jamesg1213

Moshkito
 


The health care system is another story ... the tax detail that Susan asked about was not quite about the health details. I stuck to the tax information.

                                                                          Susan G
My question is for the purpose of calculating income for health care

 
Seemed like it was exactly that...

You can't separate that income in your tax return! And unless you can find another shelter for it, it will be indicated in full! If you had depreciation and other expenses on it, I think you might get around it some, but even then, I think it's a percentage ... can't remember. Trust me, these health care folks KNOW THE LAW better than you or I, and that is the tough issue all around. You're not likely to win, that battle.
 

BobF
IBLT

*Chortle!* 

ampfixer
Don't move to Canada. It's worse here. Free health care is a myth and I have to spend $500+ on meds every month. I can get diagnosed for free, I can get surgery for free, but drugs have no free ride. My employer of 30 years just cancelled my drugs, dental, vision and life insurance. In another month they will try and cancel my pension.
 Good luck with your insurance, I can't get any because of my health.

@ John-
Wow. Sorry to hear of your troubles. I hope things improve for you soon. No plans to move to Canada in the near future (but the results of next year’s election might factor in!)

slartabartfast
Actually, I believe the MAGI is based on your Adjusted Gross Income…

@David-
Aha! That sounds much more reasonable and more like what I thought the calculation would be based on.
But…
@Pedro, et. al.-
Thanks for the good advice to consult a professional about this, but I probably can’t afford one this year.
Just to be clear, my rental income has absolutely nothing to do with my self-employment income. The rental property is in Florida and my home and business is in NYS.
 
If I have to report my rental income as part of my Gross Income without being able to deduct expenses for repairs, taxes, depreciation, etc., then I’m screwed. I said in the OP that it would be about twice what I was paying last year, but it would actually be about three times what I was paying monthly and I simply can’t do it.
 
I’ll be eligible for Medicare in September, so if I can limp along until then…
 
I did hire a tax consultant one time back in the ‘80s and vowed I never would again. I’d never before nor since paid so much in one year for taxes (including his fees).
 
I'll do some research on CPAs in the area.
 
Thanks, all—
 
-Susan
 

I have wondered what would happen if a person got sick, showed up at the hospital and didn't have I.D. on them? Or didn't have insurance? Those are the people they seem to take.
The new health system was supposed to be affordable for those who can't afford it, and herein might be an angle........If you show a low enough income you would qualify for reduced healthcare. You could maybe shelter some of your income in tax deferred investments. A reasonably healthy person could opt not to use any healthcare for a short time and hope for the best.
There are plenty of those quick stop medical treatment places that work on a pay as you go approach. The last few times I went to the doc he looked at me and said...yep, you're sick. Well thanks, here's my copay.
 
I'm no accountant but I know that if you file as an LLC or corporation you have some protections over  a sole proprietor. Could the rental property be assigned as a separate business? This might have advantages.
FWIW turbo tax lets you go through different scenarios before you actually file. It can run multiple versions of your info in different ways to see what works best.