Tag Archives: Health Care Credit

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.

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.

 

Taxpayers Use New Information Form to claim Premium Tax Credit

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.

The Individual Shared Responsibility Payment

September 16, 2014

Beginning in 2014, the individual shared responsibility provision of the Affordable Care Act requires each individual to:

  • Maintain a minimum level of health care coverage – known as minimum essential coverage, or
  • Qualify for an exemption, or
  • Make an individual shared responsibility payment when filing their federal income tax returns.

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:

  • One percent of your household income above the income filing threshold for your tax filing status, or
  • A flat dollar amount of $95 per adult and $47.50 per child (under age 18) in your family, but no more than $285 per family.

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.

  • Using the household income formula: Subtract the tax return filing threshold amount for 2014 from the 2014 household income, then multiply the answer by one percent (0.01).
    $70,000 – $20,300 = $49,700
    One percent of $49,700 equals $497.00.
  • Using the flat dollar amount formula: Add $95 per adult for Eduardo and Julia to $47.50 per child – for their two children.
    $95.00 + $95.00 + $47.50 + $47.50 = $285.00

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.

A Summer Adjustment Can Prevent a Tax-Time Surprise

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:

  • Publication 5152: Report changes to the Marketplace as they happen  English | Spanish

IRS YouTube Videos:  

IRS Podcasts:

 

 

Affordable Care Act for Individuals

The Health Insurance Marketplace – Learn about Your Health Insurance Coverage Options

If you don’t have coverage or if you have it but want to find out about other options; help is available at the Health Insurance Marketplace. While no one is required to use the Marketplace, if you need insurance, it may be right for you. The Marketplace is where you can find health insurance coverage options that fit your budget and meet your needs.

The Department of Health and Human Services administers the requirements for the Marketplace and the health plans they offer.

An open enrollment period to get coverage for 2014 through the Marketplace began on October 1, 2013 and runs through March 31, 2014. The start of your coverage depends upon when you enroll.

When you visit the Marketplace, you can fill out one Marketplace application to learn if you can get lower costs based on your income, compare your coverage options side-by-side, and if you choose, you can enroll in health insurance coverage.

If you purchase coverage through the Marketplace, you may be eligible for the premium tax credit. This refundable tax credit helps people with moderate incomes afford health insurance coverage they purchase through the Marketplace.

If you are eligible for the credit, you can choose to “get it now” by having some or all of the credit paid in advance.  These payments go directly to your insurance company to lower what you pay out-of-pocket for your monthly premiums during 2014.  Or you “get it later” by waiting to  get the credit when you file your 2014 tax return in 2015.

For more information about your coverage options, financial assistance and the Marketplace, visit HealthCare.gov. Find out more about the premium tax credit, as well as other tax-related provisions of the health care law at www.IRS.gov/aca.

Tax On Wheels, LLC can answer your healthcare reform tax questions.  Simply give us a call at 803 732-4288.

Don’t Miss the Health Insurance Deduction if You’re Self-Employed

If you are self-employed, the IRS wants you to know about a tax deduction generally available to people who are self-employed.

The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents. The insurance can also cover your child who was under age 27 at the end of 2012, even if the child was not your dependent.

You may be able to take this deduction if one of the following applies to you:

  • You had a net profit from self-employment. You would report this on a Schedule C, Profit or Loss From Business, Schedule C-EZ, Net Profit From Business, or Schedule F, Profit or Loss From Farming.
  • You had self-employment earnings as a partner reported to you on Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc.
  • You used an optional method to figure your net earnings from self-employment on Schedule SE, Self-Employment Tax.
  • You were paid wages reported on Form W-2, Wage and Tax Statement, as a shareholder who owns more than two percent of the outstanding stock of an S corporation.
  • There are also some rules that apply to how the insurance plan is established. Follow these guidelines to make sure the plan qualifies:
  • If you’re self-employed and file Schedule C, C-EZ, or F, the policy can be in your name or in your business’ name.
  • If you’re a partner, the policy can be in your name or the partnership’s name and either of you can pay the premiums. If the policy is in your name and you pay the premiums, the partnership must reimburse you and include the premiums as income on your Schedule K-1.
  • If you’re an S corporation shareholder, the policy can be in your name or the S corporation’s name and either of you can pay the premiums. If the policy is in your name and you pay the premiums, the S corporation must reimburse you and include the premiums as wage income on your Form W-2.

For more information, see Publication 535, Business Expenses or contact Tax On Wheels, LLC at 803 732-4288.

Dispelling Myths About the Affordable Care Act

As a business owner, it can be difficult to understand how the Affordable Care Act can affect your business. So to help clarify the myths versus facts, the Small Business Administration is launching a new blog series called “Myth vs. Fact: The Affordable Care Act and Small Business.”

One prominent line of thinking that seems to recur frequently is the idea of making sure your business never reaches the 50 full time employee threshold that places you under the financial dictates of the Affordable Care Act.  The idea is to layoff or never hire that last employee in order to avoid the financial consequences of having to provide health care insurance for all of your employees.  My question is this, doesn’t this kind of thinking allow the competition to come in and steal market share by serving those customers who are not getting the proper attention from your 49 employees?

I’m just saying, The Affordable Care Act may not be a pillar of the laissez-faire free market economics but failing to adequately serve your customers will almost certainly bring the wrath of the free market down on your head.

INSURANCE IMPLICATIONS OF OBAMACARE AND THE APPROVAL OF THE AFFORDABLE CARE ACT

We have recently made available to our mailing list clients a brief summary of The Affordable Care Act, more commonly known as ObamaCare.  This summary explains how many of us will be affected when mandatory health care coverage becomes effective January 1, 2014.  This information can help you be ready for the changes that are coming.

Unfortunately, due to contractual obligations we cannot publish the summary to this blog.  However, the good news is there is no cost or obligation to join our email list which provides this type of useful financial information for ordinary everyday people written in easy to understand language.

If you would like to begin taking control of your financial affairs this is a good place to start.  To be added to our list and receive your very own copy of this powerful tool all you have to do is ask.  Simply contact me at:

milton.cooley@ceterafs.com

and ask to be added to the weekly email list.  If you change your mind, its just as easy to remove yourself by clicking on the “remove me” link at the bottom of each weekly email.

So give it a try, you’ve got absolutely nothing to lose and everything to gain.

 

 

 

 

 

 

 

 

 

Health Insurance Tax Breaks for the Self-Employed

If you’re self-employed and paying for medical, dental or long-term care insurance, the IRS wants to remind you about a special tax deduction for some insurance premiums paid for you, your spouse, and your dependents.

Starting in tax year 2011, this deduction is no longer allowed on Schedule SE (Form 1040), but you can still take it on Form 1040, line 29.

You must be one of the following to qualify:

  • A self-employed individual with a net profit reported on Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming.
  • A partner with net earnings from self-employment reported on Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., box 14, code A.
  • A shareholder owning more than 2 percent of the outstanding stock of an S corporation with wages from the corporation reported on Form W-2, Wage and Tax Statement.

The insurance plan must be established under your business.

  • For self-employed individuals filing a Schedule C, C-EZ, or F, the policy can be either in the name of the business or in the name of the individual.
  • For partners, the policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business.
  • For more-than-2-percent shareholders, the policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business.

Please contact Tax On Wheels, LLC at 803 732-4288 if we can assist you with this or any other tax issue.