8/21/2025
Why Self-Employed & Business Owners Get Caught Off Guard
- Income Fluctuations – Business revenue changes month to month.
- Incorrect Projections – Mistaking gross for net income.
- Mid-Year Success – A big contract or sale boosts income unexpectedly.
The Hidden Tax Bill
Many Marketplace enrollees don’t realize:
- The IRS will compare your tax return to your Marketplace application.
- Any overpayment in credits will be added to your tax bill.
- In some cases, the repayment can be thousands of dollars.
3 Ways to Avoid Paying Back Credits
1. Be Conservative with Your Estimate Project your income slightly higher to avoid getting more credits than you should.
2. Update Your Marketplace Application Mid-Year If your income changes, update your information right away.
3. Consider Going Off-Marketplace Private PPO plans don't rely on tax credits. You pay a fixed premium, and your tax return won’t trigger a repayment.
The Off-Marketplace Advantage
If your income is unpredictable, off-exchange plans can provide:
- Stable Costs – No tax-credit repayment risk.
- Better Networks – National PPO access instead of restricted HMOs.
- Lower Deductibles – Plans with $1,000-$2,500 deductibles are possible.
Case Study: How One Client Saved $4,500 at Tax Time
A freelance graphic designer estimated $40,000 income and received $400/month in credits. She landed several big contracts, pushing her income to $58,000. Without changes, she would have owed over $4,500 at tax time.
We switched her mid-year to a private PPO. She avoided the repayment, lowered her deductible, and kept nationwide coverage.
The Marketplace can be a great starting point, but if your income fluctuates, you risk surprise tax bills. Protect yourself by reviewing your plan regularly and exploring all available options.
Want to eliminate tax credit repayment risk? Call (716) 503-1113 for a free plan review.