Tag Archives: Affordable Care Act

Repeal of Obamacare or the dog that caught the car

November 12, 2016

Much like the dog that spends its existence instinctively chasing cars, not really even understanding why, but doing so just because that is what it does, the republican party has existed, almost to the total exclusion of everything else, to repeal Obamacare.

When I was a much younger man, with way more time on my hands, whenever I found my car being chased by a dog, I would simply stop the car to see what would happen.  Invariably, the answer would always be not much.  The dog would take on a perplexed demeanor, turn around in a circle a few times as if chasing its tail, let out a few half hearted barks, make eye contact with me as if to say “you are not good at this game at all”, and then head on back to the house to await the next participant.

I suspect that something very similar is about to happen with the repeal of Obamacare.

For the record, I think Obamacare has been an excellent addition to the safety net of this country and benefits a great many people for various reasons, including many who are dead set on having it repealed. While I don’t have Obamacare coverage, I benefited from Obamacare by being able to keep my kids insured on my policy while they were in college for a very affordable price.  Thanks Obama!

I also, think Obamacare has been one giant pain in the ass, particularly from a tax standpoint.  Clients typically don’t have the Obamacare form you need to properly complete their tax return so they have to go talk to the HR lady to get the proper form.  She promises to get them the form next week, which doesn’t really help us much since we are doing your tax return this week.  Thanks Obama! Sigh!

But I understand that Obamacare is the way it is, because that is the way it has to be in order to work, anything less is useless, unless you intend to have a medicare style system for everyone.  There have to be mandates and subsidies and penalties otherwise everyone will try to game the system even more than they do now.  Repealing Obamacare root and branch will throw millions of people to the wolves and not just the poor people on medicaid.  People with pre existing conditions will once again be unable to purchase private health insurance at any price.  Talk about your job killing turmoil.

I have no inside knowledge or contacts, but I suspect that we are about to see what we should have seen all along, new tweaking legislation that fixes the problems that everybody knows should be fixed in the Affordable Care Act.  Perhaps we will see  the launching of “Obamacare lite”.  It will have a great new bell and a shiny new whistle and of course we will have to change the name, Trumpcare comes to mind.  But underneath the hood, it will look pretty much the same as classic Obamacare or it will be a complete waste of time and resources.  Obamacare is a giant Jenga board and if you pull the wrong pieces from the structure the whole thing comes tumbling down.  We may find that those who hate Obamacare with a passion will look back with fondness on the good old days when we had Obamacare.  Let’s hope the new regime knows what they are doing.

So now it appears the driver of the Obamacare car has just stopped and the Obamacare chasing GOP has finally caught the car.  Now what?

As we say in the south, “We fixin to find out”.

Be careful what you wish for, you just might get it.

Tax Effects of Divorce or Separation

August 24, 2016

If you are divorcing or recently divorced, taxes may be the last thing on your mind. However, these events can have a big impact on your wallet. Alimony and a name or address change are just a few items you may need to consider. Here are some key tax tips to keep in mind:

  • Child Support.  Child support payments are not deductible and if you received child support, it is not taxable.
  • Alimony Paid.  You can deduct alimony paid to or for a spouse or former spouse under a divorce or separation decree, regardless of whether you itemize deductions. Voluntary payments made outside a divorce or separation decree are not deductible. You must enter your spouse’s Social Security Number or Individual Taxpayer Identification Number on your Form 1040 when you file.
  • Alimony Received.  If you get alimony from your spouse or former spouse, it is taxable in the year you get it. Alimony is not subject to tax withholding so you may need to increase the tax you pay during the year to avoid a penalty. To do this, you can make estimated tax payments or increase the amount of tax withheld from your wages.
  • Spousal IRA.  If you get a final decree of divorce or separate maintenance by the end of your tax year, you can’t deduct contributions you make to your former spouse’s traditional IRA. You may be able to deduct contributions you make to your own traditional IRA.
  • Name Changes.  If you change your name after your divorce, be sure to notify the Social Security Administration. File Form SS-5, Application for a Social Security Card. You can get the form on SSA.gov or call 800-772-1213 to order it. The name on your tax return must match SSA records. A name mismatch can cause problems in the processing of your return and may delay your refund.  Health Care Law Considerations.
  • Special Marketplace Enrollment Period.  If you lose health insurance coverage due to divorce, you are still required to have coverage for every month of the year for yourself and the dependents you can claim on your tax return. You may enroll in health coverage through the Health Insurance Marketplace during a Special Enrollment Period, if you lose coverage due to a divorce.
  • Changes in Circumstances.  If you purchase health insurance coverage through the Health Insurance Marketplace, you may get advance payments of the premium tax credit. If you do, you should report changes in circumstances to your Marketplace throughout the year. These changes include a change in marital status, a name change, a change of address, and a change in your income or family size. Reporting these changes will help make sure that you get the proper type and amount of financial assistance. This will also help you avoid getting too much or too little credit in advance.
  • Shared Policy Allocation. If you divorced or are legally separated during the tax year and are enrolled in the same qualified health plan, you and your former spouse must allocate policy amounts on your separate tax returns to figure your premium tax credit and reconcile any advance payments made on your behalf. Publication 974, Premium Tax Credit, has more information about the Shared Policy Allocation. For more on this topic, see Publication 504, Divorced or Separated Individuals. You can get it on IRS.gov/forms at any time.

As always, if you need assistance with this or any other tax issues, please feel free to contact us here at Tax On Wheels, LLC at 803 732-4288.

What to Do if You Don’t Receive Your Health Care Information Form

March 8, 2016

This year, you may receive one or more forms that provide information about your 2015 health coverage; these forms are 1095-A, 1095-B and 1095-C. The IRS does not issue these forms and cannot provide you with a copy of any of these forms.

This tip provides guidance about what you should do if you are expecting to receive any of these forms, but do not have them by the time you are ready to file your tax return.

Form 1095-A, Health Insurance Marketplace Statement, provides you with information about your 2015 health care coverage if you or someone in your family enrolled in coverage through the Health Insurance Marketplace. The Marketplace should have furnished Form 1095-A to you by February 1, 2016.

  • If you were expecting a form and did not get one, you should contact your Marketplace. Visit your Marketplace’s website to find out the steps you need to follow to get a copy of your Form 1095-A online. The IRS does not issue and cannot provide you with your Form 1095-A.
  • You should wait to file your 2015 income tax return until you receive this form.
  • Filing before you receive this form may delay your refund.  You need the information from Form 1095-A to complete Form 8962, Premium Tax Credit and file it with your tax return.
  • You can find more information about your Form 1095-A from the Marketplace.

Form 1095-B, Health Coverage, provides you with information about your health care coverage if you, your spouse or your dependents enrolled in coverage through an insurance provider or self-insured employer last year. Coverage providers should furnish Form 1095-B to you by March 31, 2016.

  • For questions about your Form 1095-B, contact the coverage provider. See line 18 of the Form 1095-B for a contact number. The IRS does not issue and cannot provide you with your Form 1095-B.
  • You might not receive a Form 1095-B by the time you are ready to file your 2015 tax return, and it is not necessary to wait for it to file.
  • The information on these forms may assist in preparing a return, and you, however you can prepare and file your return using other information about your health insurance.

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage Insurance, provides you with information about the health coverage offered by your employer.  In some cases, it may also provide information about whether you enrolled in this coverage. Employers that are required to issue Form 1095-C should furnish it to you by March 31, 2016.

  • For questions about your Form 1095-C, contact your employer. See line 10 of Form 1095-C for a contact number. The IRS does not issue and cannot provide you with your Form 1095-C.
  • You might not receive a Form 1095-C by the time you are ready to file your 2015 tax return, and it is not necessary to wait for it to file.
  • The information on these forms may assist in preparing a return. However you can prepare and file your return using other information about your health insurance.

Do not attach any Forms 1095 to your tax return.  Keep the health care information forms with your tax records.

For more information on these forms, see the Questions and Answers about Health Care Information Forms for Individuals on the IRS website.  And, as always, please feel free to contact Tax On Wheels, LLC if we may be of assistance to you in deciphering your tax or health insurance situation.  You may reach us by calling 803 732-4288.

The Individual Shared Responsibility Provision & Your Tax Return

January 6, 2016

The Affordable Care Act requires you, your spouse and your dependents to have qualifying health care coverage for each month of the year, qualify for a health coverage exemption, or make an Individual Shared Responsibility Payment when filing your federal income tax return.   If you had coverage for all of 2015, you will simply check a box on your tax return to report that coverage.

However, if you don’t have qualifying health care coverage and you meet certain criteria, you might be eligible for an exemption from coverage. Most exemptions are can be claimed when you file your tax return, but some must be claimed through the Marketplace.

If you or any of your dependents are exempt from the requirement to have health coverage, you will complete IRS Form 8965, Health Coverage Exemptions and submit it with your tax return. If, however, you are not required to file a tax return, you do not need to file a return solely to report your coverage or to claim an exemption.

For any months you or anyone on your return do not have coverage or qualify for a coverage exemption, you must make a payment called the individual shared responsibility payment. If you could have afforded coverage for yourself or any of your dependents, but chose not to get it and you do not qualify for an exemption, you must make a payment. You calculate the shared responsibility payment using a worksheet included in the instructions for Form 8965 and enter your payment amount on your tax return.

Whether you are simply checking the box on your tax return to indicate that you had coverage in 2015, claiming a health coverage exemption, or making an individual shared responsibility payment, you or your tax professional can prepare and file your tax return electronically.  Using tax preparation software is the best and simplest way to file a complete and accurate tax return as it guides individuals and tax preparers through the process and does all the math. Electronic filing options include IRS Free File for taxpayers who qualify, free volunteer assistance, commercial software, and professional assistance.

More Information

Determine if you are eligible for a coverage exemption or responsible for the Individual Shared Responsibility Payment by using our Interactive Tax Assistant on IRS.gov.

For more information about the Affordable Care Act and filing your 2015 income tax return, visit IRS.gov/aca. If you need health coverage, visit HealthCare.gov to learn about health insurance options that are available for you and your family, how to purchase health insurance, and how you might qualify to get financial assistance with the cost of insurance.

Please feel free to contact Tax On Wheels, LLC at 803 732-4288 if you need assistance with any tax related issues.

Are You Subject to the Individual Shared Responsibility Provision

August 14, 2015

The Affordable Care Act includes the individual shared responsibility provision that requires you, your spouse, and your dependents to have qualifying health insurance for the entire year, report a health coverage exemption, or make a payment when you file.

Who is subject to this provision?

All U.S. citizens living in the United States are subject to the individual shared responsibility provision.

Children are subject to the individual shared responsibility provision.

  • Each child must have minimum essential coverage or qualify for an exemption for each month in the calendar year. Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will generally owe a shared responsibility payment for the child.

Senior citizens are subject to the individual shared responsibility provision.

  • Both Medicare Part A and Medicare Part C – also known as Medicare Advantage – qualify as minimum essential coverage.

All permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes are subject to the individual shared responsibility provision.

  • Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a U.S. income tax return.
  • Individuals who are not U.S. citizens or nationals and are not lawfully present in the United States are exempt from the individual shared responsibility provision. For this purpose, an immigrant with Deferred Action for Childhood Arrivals status is considered not lawfully present, and therefore is eligible for this exemption even if he or she has a social security number. Claim coverage exemptions on Form 8965, Health Coverage Exemptions.
  • U.S. citizens living abroad are subject to the individual shared responsibility provision.
  • However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period. In addition, U.S. citizens who are bona fide residents of a foreign country or countries for an entire taxable year are treated as having minimum essential coverage for that year.
  • All bona fide residents of the United States territories are treated by law as having minimum essential coverage.

For more information, use the IRS tool Am I required to make an Individual Shared Responsibility Payment? Interactive Tax Assistant, and the Individual Shared Responsibility Provision Questions and Answers on IRS.gov/aca.

And, as always, Tax On Wheels,LLC is available to assist you with any tax related issues you may have.  We can be reached at 803 732-4288.

Taxpayers at risk of losing affordable health insurance

August 10,  2015

Taxpayers who have filed a valid extension for their tax return for 2014 have until October 15 2015 to file a timely tax return.   However, if you receive your health insurance through the Affordable Care Act (Obamacare) there is a little problem.  The IRS requires you to reconcile the Advance Premium Tax Credits you receive by filing a properly completed tax return.  The Advance Premium Tax Credits are funds the government sends to your insurance carrier to reduce the the actual cost of insurance paid by you.  These funds typically amount to hundreds of dollars per month.

Taxpayers who fail to file a tax return, even if you have a valid extension in place, may find that your future Advance Premium Tax Credits are in jeopardy because you have not filed a tax return.  That means your affordable health insurance premiums could suddenly become not so affordable.

Even though the tax laws allow you to delay your tax filing until as late as October 15, 2015, the Affordable Care Act requires you to reconcile your Premium Tax Credit as soon as possible by simply filing a properly completed tax return.  Recipients who fail to expeditiously file a tax return may lose access to Advance Premium Tax Credits until the tax return is filed.  If you cannot personally pay the full cost of your insurance until your credits are reinstated you could lose your health insurance coverage.

The IRS is sending out letters to affected taxpayers and has information on this situation on its website here and here.  The bottom line is, if you receive premium subsidies from the government for your health insurance you must file a tax return as soon as possible. Even if you have until October 15 to file, waiting that long could cost you your health insurance.

If you need assistance with filing your 2014 tax return please feel free to call Tax On Wheels, LLC at 803 732-4288 and let us get you caught up as soon as possible.

 

How to Determine if the Net Investment Income Tax Applies to You

February 26, 2015

If you have income from investments, you may be subject to the Net Investment Income Tax. You may owe this tax if you receive investment income and your income for the year is more than certain limits. Here are some key tips you should know about this tax:

• Net Investment Income Tax.  The law requires a tax of 3.8 percent on the lesser of either your net investment income or the amount by which your modified adjusted gross income exceeds a threshold amount based on your filing status.

• Income threshold amounts.  You may owe this tax if your modified adjusted gross income is more than the following amount for your filing status:

Filing Status Threshold Amount
Single or Head of household $200,000
Married filing jointly $250,000
Married filing separately $125,000
Qualifying widow(er) with a child $250,000

• Net investment income.  This amount generally includes income such as:

o Interest,

o Dividends,

o Capital gains,

o Rental and royalty income, and

o Non-qualified annuities.

This list is not all-inclusive. Net investment income normally does not include wages and most self-employment income. It does not include unemployment compensation, Social Security benefits or alimony. It also does not include any gain from the sale of your main home that you exclude from your income.

Refer to Form 8960, Net Investment Income Tax, to see if this tax applies to you. You can check the form’s instructions for the details on how to figure the tax.

• How to report.  If you owe the tax, you must file Form 8960 with your federal tax return. If you had too little tax withheld or did not pay enough estimated taxes, you may have to pay an estimated tax penalty.

For more on this topic, visit IRS.gov/aca and, as always, please feel free to contact Tax On Wheels, LLC at 803 732-4288 if we can be of assistance to you.

CMS Announces Special Enrollment Period for Tax Season

Date
2015-02-20
Title
CMS Announces Special Enrollment Period for Tax Season
For Immediate Release
Friday, February 20, 2015
Contact
press@cms.hhs.gov

CMS Announces Special Enrollment Period for Tax Season
Eligible consumers have from March 15 through April 30 to enroll in coverage

The Centers for Medicare & Medicaid Services (CMS) announced today a special enrollment period (SEP) for individuals and families who did not have health coverage in 2014 and are subject to the fee or “shared responsibility payment” when they file their 2014 taxes in states which use the Federally-facilitated Marketplaces (FFM). This special enrollment period will allow those individuals and families who were unaware or didn’t understand the implications of this new requirement to enroll in 2015 health insurance coverage through the FFM.

For those who were unaware or didn’t understand the implications of the fee for not enrolling in coverage, CMS will provide consumers with an opportunity to purchase health insurance coverage from March 15 to April 30.  If consumers do not purchase coverage for 2015 during this special enrollment period, they may have to pay a fee when they file their 2015 income taxes.

Those eligible for this special enrollment period live in states with a Federally-facilitated Marketplace and:

  • Currently are not enrolled in coverage through the FFM for 2015,
  • Attest that when they filed their 2014 tax return they paid the fee for not having health coverage in 2014, and
  • Attest that they first became aware of, or understood the implications of, the Shared Responsibility Payment after the end of open enrollment (February 15, 2015) in connection with preparing their 2014 taxes.

The special enrollment period announced today will begin on March 15, 2015 and end at 11:59 pm E.S.T. on April 30, 2015.  If a consumer enrolls in coverage before the 15th of the month, coverage will be effective on the first day of the following month.

This year’s tax season is the first time individuals and families will be asked to provide basic information regarding their health coverage on their tax returns.  Individuals who could not afford coverage or met other conditions may be eligible to receive an exemption for 2014. To help consumers who did not have insurance last year determine if they qualify for an exemption, CMS also launched a health coverage tax exemption tool today on HealthCare.gov and CuidadodeSalud.gov.

“We recognize that this is the first tax filing season where consumers may have to pay a fee or claim an exemption for not having health insurance coverage,” said CMS Administrator Marilyn Tavenner.  “Our priority is to make sure consumers understand the new requirement to enroll in health coverage and to provide those who were not aware or did not understand the requirement with an opportunity to enroll in affordable coverage this year.”

Most taxpayers, about three quarters, will only need to check a box when they file their taxes to indicate that they had health coverage in 2014 through their employer, Medicare, Medicaid, veterans care or other qualified health coverage that qualifies as “minimum essential coverage.”  The remaining taxpayers – about one-quarter – will take different steps. It is expected that 10 to 20 percent of taxpayers who were uninsured for all or part of 2014 will qualify for an exemption from the requirement to have coverage. A much smaller fraction of taxpayers, an estimated 2 to 4 percent, will pay a fee because they made a choice to not obtain coverage and are not eligible for an exemption.

Americans who do not qualify for an exemption and went without health coverage in 2014 will have to pay a fee – $95 per adult or 1 percent of their income, whichever is greater – when they file their taxes this year.  The fee increases to $325 per adult or 2% of income for 2015.  Individuals taking advantage of this special enrollment period will still owe a fee for the months they were uninsured and did not receive an exemption in 2014 and 2015.  This special enrollment period is designed to allow such individuals the opportunity to get covered for the remainder of the year and avoid additional fees for 2015.

The Administration is committed to providing the information and tools tax filers need to understand the new requirements. Part of this outreach effort involves coordinating efforts with nonprofit organizations and tax preparers who provide resources to consumers and offer on the ground support. If consumers have questions about their taxes, need to download forms, or want to learn more about the fee for not having insurance, they can find information and resources at www.HealthCare.gov/Taxes or www.IRS.gov. Consumers can also call the Marketplace Call Center at 1-800-318-2596.  Consumers who need assistance filing their taxes can visit IRS.gov/VITA or IRS.gov/freefile.

Consumers seeking to take advantage of the special enrollment period can find out if they are eligible by visiting https://www.healthcare.gov/get-coverage. Consumers can find local help at: Localhelp.healthcare.gov or call the Federally-facilitated Marketplace Call Center at 1-800-318-2596. TTY users should call 1-855-889-4325. Assistance is available in 150 languages. The call is free.

For more information about Health Insurance Marketplaces, visit: www.healthcare.gov/marketplace

Open enrollment for ACA health plans extended thru April 30

February 21, 2015

We have not received an official announcement about the affordable care act open enrollment period extension but it is being widely reported in the media.

Apparently some of you have been living under a very large rock and somehow had no idea that you had any obligation to go out and get yourself some health insurance coverage.  And your first clue that there was this thing called Obamacare was when your tax preparer hit you with the news that a big chunk of your refund just got gobbled up by this thing called the “Individual Responsibility Payment”.

Well the federal government feels your pain, and has decided to give you a few more weeks to try and prevent your refund from next year’s return from being eaten up again.  If you had a penalty payment on your 2014 tax return and can self attest to the fact that you just literally had no idea whatsoever that you were supposed to do something with health insurance, well sir, you are in luck.  Simply visit Healthcare.gov to see you can still obtain coverage in the extended open enrollment.

Stay tuned, we may post more information about this when and if we get an official pronouncement about the extension.  In the meantime, please feel free to contact Tax On Wheels, LLC at 803 732-4288 if we can be of assistance to you.

 

 

Open enrollment for ACA health plans ends Sunday

Sunday is the last day to enroll in a health insurance plan for 2015. If you miss that deadline, you may not be able to get coverage until 2016. And while you may not get sick in 2015, if you don’t have health insurance, you will pay a hefty penalty when you file your federal income tax return next year.
While the penalty is a minimum of only $95 per adult without coverage in 2014, that fee rises to a minimum of $325 per adult without coverage in 2015, and to $695 per adult in 2016.
Don’t miss out on preventive care that can keep you healthy. Put your dollars towards premiums, not penalties. Calculate your estimated monthly 2015 premium tax credit and coverage options in minutes.

Tax On Wheels, LLC is here to assist you with all tax related needs.  Please let us know if you need assistance with obtaining appropriate health insurance coverage.  We can be reached at 803 732-4288.