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Tag Archive for Affordable Care Act

“Abolish The IRS” Distracts From Needed Reforms

Republican presidential candidates Senators Ted Cruz and Mike Huckabee would like to abolish the IRS. They are not saying they want to abolish taxes, just the agency that collects them. Even if either is able to simplify taxes to the point that no taxpayers have questions or need guidance, we still need a tax collector, as well as an auditor to ensure compliance.

A call to abolish the IRS is a distraction. That’s too bad because there are significant improvements needed to our federal tax system – a system that includes not only the income tax, but also employment, excise and estate and gift taxes. Tax reform must be the focal point, not termination of the entity that collects revenues to fund schools and roads, provide national defense, and much more.

The IRS is an easy scapegoat for complaints about our tax laws. But those laws come from Congress. Yes, the Read more

Was Your No-Health-Insurance Penalty A Surprise?

A tweet from an Indiana resident by the name of Benjamin Miller, including a picture of the IRS notice he received advising him that he owes $2,344 as a penalty for not having health insurance, has gone viral and ignited a firestorm.

Mr. Miller stated in his post that he didn’t buy health insurance because his premiums jumped by over $1,000 to $1,400 per month. Of course the increase in Mr. Miller’s insurance premiums were most likely due to the mandatory provisions included in the health plan that were needed to meet the minimum essential coverage requirements of the Affordable Care Act (ACA).

Mr. Miller, like many uninsured taxpayers, probably didn’t fully read the penalty provisions Read more

Obamacare – Can Pieces Be Removed?

Presidential candidate Clinton has called for repeal one of the numerous parts of the Affordable Care Act (aka Obamacare).  Reuters reports that on September 29, 2015, she called for repeal of the “Cadillac tax” provision that goes into effect starting in 2018 (“Clinton calls for repeal of ‘Cadillac tax’ on healthcare plans,” by John Whitesides, Reuters, 9/29/15).

A few observations on this:

• What happens when one piece of the complete healthcare reform plan is removed? The Cadillac tax raises revenue by imposing an excise tax on certain expensive plans offered to employees (see IRC Section 4980I).  Likely it also is an incentive not to offer these Read more

Cheat Sheet For 2015 Tax Planning

It’s a good time to get planning for this year’s tax challenges. For tax year 2015, there are annual inflation adjustments for more than 40 tax provisions, including the tax rate schedules, and other tax changes. The tax items for tax year 2015 of greatest interest to most taxpayers include the following dollar amounts. Keep in mind that the AFA (Affordable Care Act) will increase many taxes on capital gains, income, and other areas including reducing tax deductions for high income earners and families.

Income Tax Rates: The tax rate of 39.6 percent affects singles whose income exceeds $413,200 ($464,850 for married taxpayers filing a joint return), up from $406,750 and $457,600, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds are described in the revenue procedure.

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Beware of Draconian Penalties For Health Reimbursement Plans

Beginning in 2015, large employers (those with 100 or more full-time equivalent employees) must begin offering health insurance coverage to their employees. Then, in 2016, employers with 50 or more equivalent full-time employees must do the same or face penalties, called the “large employer health coverage excise tax.”

Employers with fewer than 50 full-time equivalent employees are never required to offer their employees an insurance plan, but qualified small employers who do provide coverage may qualify for the small business health insurance credit.

In the past, many smaller employers have simply reimbursed their employees for the cost of insurance. They found it less expensive and had fewer administrative costs than having Read more

4 Thoughts About Supreme Court Premium Tax Credit Decision

As we all know by now, the US Supreme Court upheld the government regulations that provide that an otherwise qualified individual who obtains health insurance through the federal exchange (rather than a state exchange) is entitled to a Premium Tax Credit (PTC). This is the 6/25/15 decision in King v Burwell. I think this is the logical ruling because the Act does provide that if a state doesn’t create an exchange, the Department of Health and Human Services (HHS) is to establish one. Also, since this is the “Affordable Care” Act we are talking about, the PTC is a key part that helps make insurance affordable for many who have household income at or below 400% of the federal poverty line (more so for younger people in regions where the cost of living is not high – not for all individuals).

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Supreme Court, In A 6-3 Decision, Upholds Affordable Care Act (Obamacare) Subsidies

Breaking: Supreme Court, in a 6-3 decision, upholds Affordable Care Act (Obamacare) subsidies. The ruling allows federal tax credits to be issued to people who buy health plans through a federally run ACA exchange.

 

 

 

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Your Taxes And The Affordable Care Act

Starting with this year’s filing season, taxpayers must report certain information related to health care coverage on their 2014 tax return when they file this April. In addition, taxpayers must provide proof of health insurance coverage or that they have received an exemption.

With that in mind, let’s take a look at how the Affordable Care Act might affect your tax situation, and based on your type of coverage, which new tax forms you might be receiving.

Tip: For additional information about IRS tax forms related to health care insurance, please see the article, Health Care Law: Changes to IRS Tax Forms, below.

Overview

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Another Affordable Care Act Oddity

To help more people obtain health insurance, the Affordable Care Act (ACA) provides a subsidy in the form of a refundable, advanceable tax credit – the Premium Tax Credit (PTC). Generally, if your household income is at least 100% of the Federal poverty line, but not over 400% of that line, and you are not offered affordable coverage from your employer, you are eligible.

For many people, their household income is roughly the same each month. But not for everyone. Perhaps you started the year with monthly income within the eligibility range and obtained subsidized insurance for those months. But, then you get a better paying job or a bonus (but still no offer of affordable health insurance from your employer), and your annual household income goes above 400% of the FPL? Well, then you have to repay the Read more

Health Care Law: Changes to IRS Tax Forms

This year, there are some changes to tax forms related to the Affordable Care Act. Along with several new lines on existing forms, there are also two new forms that need to be included with some tax returns.

While most taxpayers simply need to check a box on their tax return to indicate they had health coverage for all of 2014, there are new lines on Forms 1040, 1040A, and 1040EZ related to the health care law. Information about the new forms and updates to existing forms is summarized below

Form 8965, Health Coverage Exemptions

Complete this form to report a Marketplace-granted coverage exemption or claim an Read more

Busy Season Updates – Tangible Property Regulations And Affordable Care Act

Well into the start of busy season, the IRS issued important guidance on some parts of the Affordable Care Act (ACA) and how small businesses can adopt the tangible property regulations (TPR).  I’ve got a summary of the ACA updates (and beyond) in a short article in the 3/12/15 AICPA Tax Insider – An update on Affordable Care Act busy season developments.

Here is my summary of the TPR items as well as a recent news release by the California Franchise Tax Board on conformity with TPR.

Policy Item: Both the ACA items (particularly the relief from the $100/employee/day penalty for health reimbursement arrangements (HRAs) that violate ACA provisions), and the TPR Read more

Obamacare Confusion – Real And Made Up

Our health care system is too complex. I am not only referring to the numerous tax provisions in the Affordable Care Act (ACA or Obamacare), but the system itself.  For example, if you have health insurance, do you know what it covers, how costs are computed, how insurance companies and the medical profession make money?

On March 4, the US Supreme Court heard oral argument in King v Burwell on whether individuals who obtained health insurance through the federal exchange (because their state did not establish its own exchange), are entitled to a Premium Tax Credit (PTC).  The PTC provision in the Code (Section 36B) makes reference to state exchange. The Administration interprets that as also meaning a federal exchange. Millions of individuals have obtained (in 2014) and are currently obtaining for 2015, a PTC to help pay for Read more

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