Fast Facts: Affordable Care Act
Dukhon Tax advisors have been answering many questions in relation to ObamaCare and the Affordable Care Act (ACA). We hope these fast facts help with your 2014 tax preparation.
- The IRS opens the 2014 tax filing season on Tuesday, January 20, 2015.
- Taxes must be filed by the IRS deadline: Wednesday, April 15, 2015.
- When filing 2014 taxes, you must report the status of your health care coverage and any cost assistance you received.
- Forms 1095-A, 1095-B or 1095-C from your insurer will detail the months you had coverage. In the event you have multiple sources of coverage, you will receive multiple forms.
- Did you, or a dependent household member, go three months or more without minimum essential coverage? You will need to make a Shared Responsibility Payment or file an exemption.
- Exemptions are only valid with an Electronic Confirmation Number (ECN). This number is provided by the Health Insurance Marketplace. Exemption requests take time to process. Ensure you apply early to avoid late tax filing penalties.
- Taxes filed in 2015 are subject to the 2014 fee rate. Cost assistance is based on the 2013 Federal Poverty Guidelines. Annual fee rate for not having insurance (2014) is $95/adults, $47.50/child, family $285, or 1% of household income to a max threshold. In 2015, the annual fee rate for not having insurance jumps to $325/adult, $162.50/child, family $975, or 2% of household income to a max threshold.
- Income below the minimum threshold for filing a tax return? You are exempt from the fee for not having coverage, but may qualify for Medicaid or Marketplace cost assistance.
- Made less than you projected? Opted not to take the full tax credit in advance? If you did not update your Marketplace information, you need to deduct the remaining amount on your Federal income taxes. See Form 8962 – Premium Tax Credit (PTC).
- Small business owners can use the Small Business Health Options Program (SHOP) to obtain coverage and credits for their employees.
- Minimum essential coverage can only be obtained during open enrollment.
- Unlike the typical methods of collection (liens, jail time), the IRS is not able to enforce the Individual Shared Responsibility Provision. Instead, the IRS will withhold your Federal Income Tax refund.
To learn more about the Affordable Care Act, the Individual Shared Responsibility Provision or view IRS publications, please visit: http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Individual-Shared-Responsibility-Provision
For personal or business tax preparation, or to obtain guidance with the Affordable Care Act, the team at Dukhon Tax is ready to help. Visit us at DukhonTax.com
- How business owners may be able to reduce tax by using an S corporationFebruary 25, 2020
- 3 best practices for achieving organic sales growthJanuary 23, 2020
- Can you deduct charitable gifts on your tax return?January 23, 2020
- Cents-per-mile rate for business miles decreases slightly for 2020January 21, 2020
- Landlords need to include these rental-related payments in their gross income.January 17, 2020