Posted on 12/30/2014 2:07:45 AM PST by Libloather
The Affordable Care Act (ACA) and its Possible Effects on You and Your Tax Return
We wanted inform you how the Affordable Care Act (ACA), sometimes also referred to as Obamacare, may impact all of us this tax season. The ACA created the new Premium Tax Credit and the Individual Responsibility Payment that may affect your tax return this season.
More Complex Tax Returns
The entire filing process will be more complicated this year, with every tax return to now include new provisions related to health insurance. This year, many taxpayer returns will contain additional forms related to health care coverage. Tax returns will be more complicated and will take more time and expertise to complete.
Possible Reduced Refunds
The new Individual Responsibility Payment will be assessed by the IRS against taxpayers who do not indicate on their return that they either had health care coverage throughout 2014, and do not qualify for an exemption from the health care coverage requirement. This new payment amount is collected by the IRS as part of the new ACA law starting with 2014 returns. As a result, if the IRS subjects you to this payment amount, your refund may be less than you expected, or less than you received in past years.
Additionally, the IRS may adjust your refund (either up or down) if you currently receive health insurance through the Marketplace (sometimes also referred to as Obamacare) but the IRS determines that the information on file at the Marketplace is incorrect.
Who is Affected?
All taxpayers across the country are subject to the requirements of new ACA law. The federal government urges all consumers receiving coverage through the their federal or state Marketplace to report "life changes" that can affect their coverage as soon as the changes take place (such as changes in marital status, income, number of dependents, where you live, or disability status). The government urges you to report these changes so that insurance adjustments can be made immediately and tax refunds not affected as much.
Watch for New Tax Documents.
You are accustomed to receiving various forms that are necessary to prepare your return. Some of these are Form (s) W2, Form(s) 1099-INT, Form(s) 1099-B, Form(s) 1098, and Form(s) SSA-1099. Many of these are due to be received by January 31st, but can be as late as February 15th.
For 2014 filing, you should also receive a Form 1099-A (or possibly a Form 1099-B or 1099-C) that provides information about your insurance coverage. These important tax documents will be sent to you by your health insurance provider. Include these forms in your tax information that you submit to your tax professional for your tax preparation. They are necessary to accurately prepare your 2014 tax return.
Information about Members of Your Household.
To complete the ACA filing requirements on your 2014 tax return, information about all members of your household and their income, whether or not you claim them as a dependent, will be required. The requirement for this information goes far beyond any thing we have seen in the past. Your tax professional may need to see (or prepare) the tax returns for all members of your household who have 2014 income. So, make sure your children (including college students) with earnings, parents, and other members of the household who have income can provide the information to accurately prepare your (and their) tax return.
Thanks from a fellow vet for posting this!
These are likely 'fecebook' people who already post every detail of their lives. It won't faze them.
Anyone who has enabled this to proceed (including funding) should be out of work next election.
First, understand that this is FREE ADVICE, and thus worth what you pay for it!
What you are obviously talking about is what I consider to be one of the most far-reaching regs to come out of the PPACA, the fact that a taxpayer MUST take into account not just CLAIMED Dependents but also CLAIMABLE Dependents in computing tax liability and fines for lack of health insurance for any given month of the tax year.
Obviously, I see what you are trying to accomplish but I feel that it still goes back to what the IRS interprets as complying with regulations. The Supreme Court has long ruled that TAX AVOIDANCE is very legal if you are merely avoiding potential tax consequences but there have been any number of 'tax shelters' that have been ruled to be illegal and open for IRS prosecution.
This 'Claimable Dependency' is, I feel, headed for the courts as soon as someone is actually penalized for violation of this regulation. As new 'law' it has to wait for a victim to have 'standing' (legal term) to challenge the law and regulations. Since the remedy in tax law is for the taxpayer to owe the unpaid tax, the penalty and then the interest accrued on that summed amount, the taxpayer victim in this speculated case would be wise to immediately pay the owed amounts to the IRS in hopes that the Tax Courts to the appeals process will reverse the IRS EVENTUALLY!
Thus my former advice, better to be unnoticed than the poster child!
I’d like them to rot in prison...then burn in Hell.
Every Congressman/woman knew. Don’t let then lie to you. They knew. They might not give a shit or wanted it, but they knew what was in obamacare when they voted for it.
Once a Flat/Fair tax system is instituted for the US, the final piece of the reform will be to fire all current IRS employees and hire all new staff to implement the new taxing system...
Sure you have to have taxation to operate government - the issue is how much government and how much and what type of taxes.
My personal opinion is that taxes upon “income” - the fruits of one’s own personal labor or creativity - is a thinly disguised form of slavery, and is thereby inherently immoral. Especially in a nation that fought a bloody civil war over that very issue, among others.
After all, if a man doesn’t possess his own work, what does he possess? Perhaps his soul, but nothing more.
Tax consumption, tax imports, or tax property. But do not tax labor, for it belongs to no one save he who created it.
Here is an article about what constitutes a household for ACA purposes. It is a year old and may be superseded when 2014 tax forms are released, but I doubt it.
I think the issue is if you claim a qualifying relative as a dependent then you may be responsible for their health insurance or paying the fine if they don't have it. This is why spouses may divorce and the non working spouse goes on expanded medicaid, etc...
I am letting off steam. My rant supposed EVERYBODY did not file.
I agree with that sentiment, but the discussion is likely to come down to semantics more than anything else. At the end of the day it doesn't really matter if I earn $80,000 and pay 25% of my income in taxes, or if the IRS sends me a tax bill for $20,000 as a flat tax without any relationship to income. I would certainly support a true flat tax (i.e., everyone pays the same tax regardless of income, not the same tax rate) over any other alternative, largely for the reasons you cited.
I think it's much more simple than the reasons you cited, though. It makes sense to charge everyone a flat, uniform tax simply because the use of public assets doesn't vary depending on income.
Much as I hate this particular provision of the ACA, I have to admit that the definition of "household" presented in that article has an objective, rational basis for it -- since it is directly tied to people who are listed on a tax return as dependents.
Interesting observation about married couples divorcing, though I'm not sure there's an advantage for a non-working spouse to be "divorced" unless the working spouse is self-employed and wants to save a lot of money on insurance coverage.
I do not agree. Government has NO MORAL CLAIM on income, which is but an economic manifestation of labor. If one concedes that government has first claim on your labor, then you have conceded that slavery is morally acceptable.
So all that high-toned historical rhetoric about the Civil War is just so much hot air.
Of course, this won’t change in our lifetimes, but I think the concept of slavery = income taxes adds to the debate.
How do propose funding the cost of government in the United States?
Consumption taxes. Then how much you pay becomes strictly a function of how much you spend. Labor and capital should be untaxed.
It used to be that way until Theodore Roosevelt found it too tempting to target success as a sop to the Marxists who thrive on class envy.
“Malefactors of great wealth” was his catchphrase.
Muslims aren’t exempt.
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