Question: My estimated AGI (2 person household) for 2014 is $20,000. In 2012 I cashed out of an annuity and had an AGI of $70,000. I was considering cashing out of another annuity in 2013 which would lead to a similar AGI. Can I obtain the reduced rates (AGI $20,000) for my 2014 premiums? What's the best way to proceed?
Answer: Since your estimated 2014 income is way less than the 10% allowed without verification, your best option is to submit an affidavit explaining that you will not be cashing out another annuity in 2014. You should also submit documentation showing the annuity income. Feel free to cash another one for the 2013 tax year. It will not affect anything at this point. If you do so, you will probably have to do this again when you renew for 2015 to explain why your income in 2013 if higher than your 2015 estimate.