The Affordable Care Act ("Obamacare" or the "ACA") has a load of provisions that are kicking in this year for U.S. taxpayers, that will definitely affect your tax return.
So in that spirit, PLEASE share this information with your friends and family. There sadly may be some ugly surprises for people who are not aware of these provisions.
First of all, this legislation has continued to be a political firecracker. I am NOT making predictions about the political, judicial or legislative future of this bill.
My job, as a tax professional, is neither to rail against the establishment nor to prop it up -- instead, I am YOUR advocate as you tip-toe through the maze of meeting its requirements.
My Washington connections, and other CPAs and attorneys around the country, seem to feel it’s unlikely that this legislation will simply become "unwound". At least not for the next 2 to 3 years.
Frankly, this upcoming year (2015) will be the first year that ALL U.S. taxpayers will feel the effects of the Affordable Care Act. That's because starting with returns that are due on April 15, 2015 (which cover the year 2014)... your tax returns are now required to report on your health insurance coverage status.
This is whether you enrolled in health insurance (or not), and whether you used an ACA plan through the various state and federal marketplaces -- or not. It's for ALL taxpayers.
(There are some exemptions to this reporting requirement, and those can be found here: https://www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/ ).
Under the ACA provisions, you are required to show that you had insurance starting on January 1, 2014 in order to avoid the penalty – and if you were without coverage, it must have been for less than 3 months during 2014, if you are to avoid penalties.
Future penalties are scheduled to increase substantially. While some taxpayers may consider it a decent tradeoff to just pay the penalty for this year, it becomes increasingly costly to do so in the future.
Second, premium tax credits will be evaluated and adjusted according to information submitted on your tax returns.
This means that if you are 1) currently receiving a tax credit (provided directly to your health insurance provider as payments towards your premium -- and offered only to eligible individuals and families without access to employer-sponsored coverage, and who purchase insurance through a marketplace) and 2) your income or household size has changed since you were granted the credit, then your tax refund or obligation may be affected.
So, an important note: if your income or the size of your household HAS changed, it is imperative that my team and I help you to report this properly on your return. In fact, it may be worth contacting us while you still can change, and letting us know how your income has changed. We may be able to help you prepare, or adjust your income appropriately through our return preparation process, etc. Call us: (770) 984-8008 if you would like our help.
If you received this premium tax credit, you will be receiving Forms 1095 in the mail. KEEP THESE FORMS. You will need them for your tax preparer.
Sadly, the issuance of these forms is optional for some entities, so it can be a complicated issue to make sure you have all of them. Which leads me to my last point...
Please, for the love of all that is good and decent, do NOT try to go it alone this year when preparing your tax returns. I understand that this warning may totally seem self-serving to you. But please understand, whether you use our office or another firm – I would much rather you had an experienced professional assist you, than relying upon notoriously unreliable franchise preparers or tax software. All of the different factors that are coming into play on this year's tax return are creating a nightmare for the software companies, as well as the “franchise” preparers ... Let's just say that this is probably not the year to "give them a shot."
Please just know that our Number One goal in this and all tax and financial matters is for you and your family to sleep well and not to have to worry about all of this junk.
That's what we're here for. Let us worry about this now, so you and other families don't have to do so later on.
Dennis Bridges is a CPA and recognized leader in tax issues for logistics professionals and logistics-based enterprises. He is the author of The Truckers Tax Relief Toolkit, and co-author of best-seller, Breaking the Tax Code, 2nd Ed.
In honor of the sacrificial work effort expended by drivers and other logistics professionals, he has created the “Truckers Million Dollars Tax Cut”, a nationwide initiative to save over $1 million in income taxes for at least 2,014 truck drivers and others. He welcomes inquiries from individual drivers and others for tax preparation.
Dennis strives to bring the maximum value to every client relationship, whether income is measured in six figures or nine figures. He is best known for reaching innovative solutions to tax and business problems.
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