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.
The Affordable Care Act is bringing several changes to the tax filing season this year, including a new form some taxpayers will receive. If you or anyone in your household enrolled in a health plan through the Health Insurance Marketplace in 2014, you’ll get Form 1095-A, Health Insurance Marketplace Statement.
You will receive Form 1095-A from the Marketplace where you purchased your coverage, not the IRS. This form should arrive in the mail from your Marketplace by early February. You should wait to receive your Form 1095-A before filing your taxes.
Form 1095-A will tell you the dates of coverage, total amount of the monthly premiums for your insurance plan, information you may use to determine the amount of your premium tax credit, and any amounts of advance payments of the premium tax credit.
You will use the information to calculate the amount of your premium tax credit and reconcile advance payments of the premium tax credit made on your behalf to your insurance provider with the premium tax credit you are claiming on your tax return. To do this, you will use Form 8962, Premium Tax Credit (PTC), which you file with your tax return.
If you do not receive your Form 1095-A by early February, you should contact the state or federal Marketplace from which you received coverage. If you believe any information on your Form 1095-A is incorrect, you should contact the state or federal Marketplace from which you received coverage. The Marketplace may need to send you a corrected Form 1095-A.
You may receive more than one Form 1095-A if different members of your household had different health plans, you updated your coverage information during the year, or you switched plans during the year.
For more information about the Affordable Care Act and your 2014 income tax return, visit IRS.gov/aca or you may contact us here at Tax On Wheels, LLC for assistance. We are always glad to help you solve your tax problems. We can be reached at 803 732-4288.
January 29, 2015
To help navigate these changes, taxpayers and their tax professionals should consider filing returns 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. There are a variety of electronic filing options, including free volunteer assistance, IRS Free File for taxpayers who qualify, commercial software, and professional assistance.
|
IF YOU… |
THEN YOU… |
| Are U.S. citizens or are non-U.S. citizens living in the United States | Must have qualifying health care coverage, qualify for a health coverage exemption, or make a payment when you file your tax return |
| Have health coverage through an employer or under a government program such as Medicare, Medicaid and coverage for veterans for the entire year | Just have to check a box on your Form 1040 series return and do not read any further |
| Do not have coverage for any month of the year | Should check the instructions to Form 8965 to see if you are eligible for an exemption |
| Are eligible for an exemption from coverage for a month | Are not responsible for making an Individual Shared Responsibility payment for that month, and must claim the exemption or report an exemption already obtained from the Marketplace by completing Form 8965, Health Coverage Exemptions,and submitting it with your tax return |
| Do not have coverage and are not eligible for an exemption from coverage for any month of the year | Are responsible for making an individual shared responsibility payment when you file your return |
| Are responsible for making an individual shared responsibility payment | Will report it on your tax return and make the payment with your taxes |
| Received the benefit of more advance payments of the premium tax credit than the amount of credit for which you qualify | Will repay the amount in excess of the credit you are allowed subject to a repayment cap |
| Need qualifying health care coverage for 2015 | Can enroll in health insurance through the Health Insurance Marketplace (Marketplace) during the open enrollment period that runs through Feb. 15, 2015; once open enrollment ends, individuals can enroll only if they qualify under special enrollment provisions |
| Enroll in health insurance through the Marketplace for yourself or someone else on your tax return | Might be eligible for the premium tax credit |
| Did not enroll in health insurance from the Marketplace for yourself or anyone else on your tax return | Cannot claim the premium tax credit |
| Or another person on your tax return who is enrolled in coverage through the Marketplace is not eligible for health care coverage through your employer or under a government program | Might be eligible for the premium tax credit |
| Are eligible for the premium tax credit | Can choose to get premium assistance now to lower your monthly payments or get all the benefit of the credit when you claim it on your tax return |
| Choose to get premium assistance now | Will have payments sent on your behalf to your insurance provider. These payments are called advance payments of the premium tax credit |
| Get the benefit of advance payments of the premium tax credit and experience a significant life change, such as a change in income or marital status | Report these changes in circumstances to the Marketplace when they happen |
| Get the benefit of advance payments of the premium tax credit | Will report the payments on your tax return and reconcile the amount of the payments with the amount of credit for which you are eligible |
More Information
Find out more about the tax-related provisions of the health care law at IRS.gov/aca.
December 15, 2015
The Individual Shared Responsibility Provision
What this means for you and your family
Under the Affordable Care Act, the Federal government, State governments, insurers, employers, and individuals share the responsibility for health insurance coverage beginning in 2014. Many people already have qualifying health insurance coverage (called minimum essential coverage) and do not need to do anything more than maintain that coverage.
The individual shared responsibility provision requires you and each member of your family to either:
You’ll report minimum essential coverage, report exemptions, or make any individual shared responsibility payment when you file your 2014 federal income tax return in 2015.
Minimum Essential Coverage
If you and your family need to acquire minimum essential coverage, you have several options. They include:
Exemptions
You may be exempt from the requirement to maintain minimum essential coverage and won’t have to make a shared responsibility payment when you file your 2014 federal income tax return as long as you meet any of the following criteria:
Shared Responsibility Payment
If you or any of your dependents aren’t exempt and don’t have minimum essential coverage, you’ll need to make a shared responsibility payment on your tax return.
The shared responsibility payment (or penalty) for 2014 is the greater of:
The percentages and flat dollar amounts will drastically increase over the next three years. In 2015, the income percentage increases to 2% of household income and the flat dollar amount increases to $325 per adult ($162.50 per child under 18). In 2016, these figures increase to 2.5% of household income and $695 per adult ($347.50 per child under 18). After 2016, these figures increase with inflation.
It’s important to remember that choosing to make the individual shared responsibility payment instead of purchasing minimum essential coverage means you’ll also have to pay the entire cost of all your medical care. You won’t be protected from high medical bills, which could lead to bankruptcy.
Please feel free to contact Tax On Wheels, LLC if we can be of assistance to you. We can be reached at 803 732-4288.
September 16, 2014
Beginning in 2014, the individual shared responsibility provision of the Affordable Care Act requires each individual to:
Minimum essential coverage generally includes government-sponsored programs, employer-provided health coverage, and coverage purchased in the individual market, including the Health Insurance Marketplace. Most people already have health insurance coverage that qualifies as minimum essential coverage, and therefore will not need to make a payment if they maintain their qualified coverage. However, for each month that you or a member of your family is without minimum essential coverage and does not qualify for an exemption, you will need to make an individual shared responsibility payment.
If you and your dependents had minimum essential coverage for each month of 2014, you will check a box indicating that when you file your 2014 federal income tax return. If you qualify for an exemption, you will attach a form to your tax return to claim that exemption. If you are required to make the individual shared responsibility payment, you will calculate your payment and make the payment with your return.
If you choose to make an individual shared responsibility payment instead of maintaining minimum essential coverage, this means you will not have health insurance coverage to help pay for medical expenses.
In general, the individual shared responsibility payment for 2014 is the greater of:
The individual shared responsibility payment is also capped at the cost of the national average premium for bronze level health plans available through the Marketplace that would cover everyone in your family who does not have minimum essential coverage and does not qualify for an exemption – for example, $12,240 for a family of five. However this maximum fee will only impact the small number of high-income taxpayers who choose to go without health insurance. The payment amount is based on each individual’s personal circumstances, and information about figuring the payment can be found on our ‘Calculating the Payment’ page on IRS.gov/aca.
Example of Payment Calculation
Eduardo and Julia are married and have two children under age 18. No family member has minimum essential coverage for any month during 2014, and no family member qualifies for an exemption. For 2014, their household income is $70,000 and their tax return filing threshold amount is $20,300.
Eduardo and Julia’s shared responsibility payment for the year for 2014 is $497. That’s because the household income formula amount of $497 is greater than flat dollar formula amount of $285, and it is less than the $9,792 annual national average premium for bronze level coverage for a family of four in 2014. More examples can be found on IRS.gov/aca.
More Information
Find out more about the tax-related provisions of the health care law at IRS.gov/aca.
Find out more about the health care law at HealthCare.gov or contact Tax On Wheel, LLC at 803 732-4288 for assistance with understanding your tax obligations under the Affordable Health Care act.
When it comes to filing a federal tax return, many people discover that they either get a larger refund or owe more tax than they expected. But this type of tax surprise doesn’t have to happen to you. One way to prevent it is to change the amount of tax withheld from your wages. You can also change the amount of estimated tax you pay. Here are some tips to help you bring the amount of tax that you pay in during the year closer to what you’ll actually owe:
• New Job. When you start a new job, you must fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use the form to figure the amount of federal income tax to withhold from your pay. Use the IRS Withholding Calculator on IRS.gov to help you fill out the form. This tool is easy to use and it’s available 24/7.
• Estimated Tax. If you get income that’s not subject to withholding you may need to pay estimated tax. This may include income such as self-employment, interest, dividends or rent. If you expect to owe a thousand dollars or more in tax, and meet other conditions, you may need to pay this tax. You normally pay it four times a year. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to figure the tax.
• Life Events. Make sure you change your Form W-4 or change the amount of estimated tax you pay when certain life events take place. A change in your marital status, the birth of a child or buying a new home can change the amount of taxes you owe. You can usually submit a new Form W–4 anytime.
• Changes in Circumstances. If you receive advance payment of the premium tax credit in 2014 it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.
For more see Publication 505, Tax Withholding and Estimated Tax. You can get it on IRS.gov, or call 800-TAX-FORM (800-829-3676) to get it by mail.
Additional IRS Resources:
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Starting in 2013, some taxpayers may be subject to the Net Investment Income Tax. You may owe this tax if you have income from investments and your income for the year is more than certain limits. Here are four things from the IRS that you should know about this tax:
1. 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.
2. Net investment income. This amount generally includes income such as:
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. Net investment income also does not include any gain on the sale of your main home that you exclude from your income.
After you add up your total investment income, you then subtract your deductions that are properly allocable to this income. The result is your net investment income. Refer to the instructions for Form 8960, Net Investment Income Tax for more on how to figure your net investment income or MAGI.
3. Income threshold amounts. You may owe the tax if you have net investment income and 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
4. How to report. If you owe this 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. You can also get tax forms on IRS.gov or by mail by calling 800-TAX-FORM (800-829-3676).
Additional IRS Resources:
Tax On Wheels, LLC is available to assist you with tax planning and other issues affected by the Affordable Care Act. Please give us a call at 803 732-4288 if we can be of assistance to you.
Health Care Law Considerations for 2014
For most people, the Affordable Care Act has no effect on the 2013 income tax return they are filing in 2014. However, some people may need to make important decisions by the March 31, 2014 deadline for open enrollment.
Below are five things about the health care law you may need to consider soon.
• Currently Insured – No Change: If you already insured, you do not need to do anything more than continue your insurance.
• Uninsured – Enroll by March 31: The open enrollment period to purchase health care coverage through the Health Insurance Marketplace for 2014 runs through March 31, 2014. When you get health insurance through the marketplace, you may be able to get advance payments of the premium tax credit that will immediately help lower your monthly premium. Learn more at HealthCare.gov.
• Premium Tax Credit To Lower Your Monthly Premium: If you get insurance through the Marketplace, you may be eligible to claim the premium tax credit. You can elect to have advance payments of the tax credit sent directly to your insurer during 2014 so that the monthly premium you pay is lower, or wait to claim the credit when you file your tax return in 2015. If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your 2014 tax return, which will be filed in 2015. If you’re already receiving advance payments of the credit, you need to do nothing at this time unless you have a change in circumstance like a change in income or family size. Learn More.
• Change in Circumstances: If you’re receiving advance payments of the premium tax credit to help pay for your insurance coverage, you should report life changes, such as income, marital status or family size changes, to the Marketplace. Reporting changes will help to make sure you have the right coverage and are getting the proper amount of advance payments of the premium tax credit.
• Individual Shared Responsibility Payment: Starting January 2014, you and your family have been required to have health care coverage or have an exemption from coverage. Most people already have qualifying health care coverage. These individuals will not need to do anything more than maintain that coverage throughout 2014. If you can afford coverage but decide not to buy it and remain uninsured, you may have to make an individual shared responsibility payment when you file your 2014 tax return in 2015. Learn More.
Tax On Wheels LLC is available to answer your healthcare reform tax questions. Simply give us a call at 803 732-4288.
Starting January 2014, you and your family must either have health insurance coverage throughout the year, qualify for an exemption from coverage, or make a payment when you file your 2014 federal income tax return in 2015. Many people already have qualifying health insurance coverage and do not need to do anything more than maintain that coverage in 2014.
Qualifying coverage includes coverage provided by your employer, health insurance you purchase in the Health Insurance Marketplace, most government-sponsored coverage, and coverage you purchase directly from an insurance company. However, qualifying coverage does not include coverage that may provide limited benefits, such as coverage only for vision care or dental care, workers’ compensation, or coverage that only covers a specific disease or condition.
You may be exempt from the requirement to maintain qualified coverage if you:
A special hardship exemption applies to individuals who purchase their insurance through the Marketplace during the initial enrollment period for 2014 but due to the enrollment process have a coverage gap at the beginning of 2014.
For any month in 2014 that you or any of your dependents don’t maintain coverage and don’t qualify for an exemption, you will need to make an individual shared responsibility payment with your 2014 tax return filed in 2015.
However, if you went without coverage for less than three consecutive months during the year you may qualify for the short coverage gap exemption and will not have to make a payment for those months. If you have more than one short coverage gap during a year, the short coverage gap exemption only applies to the first.
If you (or any of your dependents) do not maintain coverage and do not qualify for an exemption, you will need to make an individual shared responsibility payment with your return. In general, the payment amount is either a percentage of your income or a flat dollar amount, whichever is greater. You will owe 1/12th of the annual payment for each month you (or your dependents) do not have coverage and are not exempt. The annual payment amount for 2014 is the greater of:
The individual shared responsibility payment is capped at the cost of the national average premium for the bronze level health plan available through the Marketplace in 2014. You will make the payment when you file your 2014 federal income tax return in 2015.
For example, a single adult under age 65 with household income less than $19,650 (but more than $10,150) would pay the $95 flat rate. However, a single adult under age 65 with household income greater than $19,650 would pay an annual payment based on the 1 percent rate.
More Information
Find out more about the individual shared responsibility provision, as well as other tax-related provisions of the health care law at www.irs.gov/aca.
For more information about your coverage options, financial assistance and the Marketplace, visit HealthCare.gov.
For help with questions about how Health Care reform affects your taxes call Tax On Wheels, LLC at 803 732-4288.
For most people, the Affordable Care Act has no effect on their 2013 federal income tax return. For example, you will not report health care coverage under the individual shared responsibility provision or claim the premium tax credit until you file your 2014 return in 2015.
However, for some people, a few provisions may affect your 2013 tax return, such as increases in the itemized medical deduction threshold, the additional Medicare tax and the net investment income tax.
Here are some additional tips:
Filing Requirement: If you do not have a tax filing requirement, you do not need to file a 2013 federal tax return to establish eligibility or qualify for financial assistance, including advance payments of the premium tax credit to purchase health insurance coverage through a Health Insurance Marketplace. Learn more at HealthCare.gov.
W-2 Reporting of Employer Coverage: The value of health care coverage reported by your employer in box 12 and identified by Code DD on your Form W-2 is not taxable. Learn more.
Information available about other tax provisions in the health care law: More information is available on IRS.gov regarding the following tax provisions: Premium Rebate for Medical Loss Ratio, Health Flexible Spending Arrangements, and Health Saving Accounts.
Tax On Wheels, LLC is available to answer your health care reform tax questions. Simply call us at 803 732-4288.