Big Game Changer
What will be the BIG GAME CHANGER for this upcoming tax season? For EVERY taxpayer, for every tax return preparer, you will need to have the answer to this question:
“Did you have minimum essential health insurance for at least one day in EVERY month of 2014?”
If you did have health insurance for yourself, good for you. “Did you have the minimum essential health insurance coverage for everyone in your family?” Tax return preparers will also need to know how much income your dependents earned. Why? Because household income plays a part in calculating your possible penalty for NOT having insurance. Before you panic, there are exceptions. If you are my tax client, I will be looking at every angle of this issue for you.
Did you know that the Affordable Care Act, commonly known as “Obamacare”, requires that every one of us are covered by minimum essential health insurance? Did you know that if you do not have this coverage, you may have to pay a penalty on your tax return?
Coverage can be a combination of Medicare Part A, Medicaid (ACCHS in Arizona), Military Health Insurance (Tricare) an employer sponsored plan. or insurance you buy on your own. These all help to meet the “Shared Responsibility” part of the plan.
If you do not have healthcare coverage for the entire year, you could be assessed a penalty. The penalty calculation formula is complicated. If I say there is a minimum penalty, will you realize that is the LOWEST it can be and that it is likely to be even higher? The lowest possible 2014 penalty for a single person is $95. The penalty for a married couple starts at $190. As the size of the family grows, the penalty grows. And it gets bigger every year. If you do not have the essential coverage for 2015, you could face a larger penalty.
This shows up on your income tax return because the IRS has been charged with the responsibility, to make sure we are paying our fair share. Not only must we pay our fair share of income tax. We must also pay our fair share of healthcare insurance premiums.
I am not a healthcare insurance provider. I am a tax return preparer. If you get your health insurance through “The Marketplace”, the insurance exchange agents will want to see your tax returns to determine how much premium assistance, or discount, you might qualify for.
Tax return preparation will take more time this year. It may cost you more this year in more ways than one. In this business, one thing we can all count on every year is that the law is ever-changing.
In spite of this tax news and gloom, I wish you all a Merry Christmas and Happy New Year!