Tag Archive for healthcare

Taxpayers Must Reconcile Marketplace Advance Payments And File Form 8962

Health Care And Taxes

Failing to file Form 8962, Premium Tax Credit, to reconcile 2019 advance payments of the premium tax credit may affect return processing, and delay the taxpayer’s refund. It may also affect their ability to get advance payments of the premium tax credit or cost-sharing reductions. Taxpayers who don’t file and reconcile their 2019 advance credit payments may not be eligible for advance payments of the premium tax credit in the future.

What is the premium tax credit?

The premium tax credit helps pay for health insurance coverage bought from the Health Insurance Marketplace. When the taxpayer or their family member applies for coverage, the marketplace estimates the amount of the premium tax credit they may be able to claim. This estimate is based on information the taxpayer provides about family size and projected household income. The taxpayer can then decide if they want to have all, some, or none of the credit paid directly to their insurance company. This option will lower their monthly payments.
Read More

Written by | Posted in Form 8962 • Healthcare • Premium Tax Credit

Hardship Exemption Rules For Not Having Health Insurance Eased

Chuck Woodson, tax penalties, Healthcare, The Tax Cuts and Jobs Act, tax reform

The Affordable Care Act (Obamacare) included a “shared responsibility payment,” which in reality is a penalty for not having health insurance. Along with this penalty came a whole slew of exemptions from the penalty, including some that were designated as “hardship” exemptions. However, the hardship relief from the penalty required pre-approval from the government health insurance marketplace, which required the applicant to provide documentary evidence of the hardship. Once approved, the applicant was issued an exemption certificate number (ECN) that needed to be included on the individual’s tax return to avoid the penalty.  Read More

Written by | Posted in Affordable Healthcare Act

X is for X-rays

TaxConnections Blogger Harold Goedde posts about the affordable care actX is for X-rays.  I have never had an X-ray, but I’m pretty sure if you are having one that means you maybe broke a bone, so I can’t recommend needing one.  When it comes to medical expenses, they are sometimes tax deductible and the rules have changed recently, tied to Obamacare.  For years the medical expenses were only deductible when they exceeded 7.5% of your AGI for the year.  Starting in 2013 that threshold has increased to 10% of AGI for people under age 65.  The 10% threshold will apply to those over 65 starting in 2017.  Seems a bit ridiculous that the medical threshold is different for people over 65, but that’s what it is.

Medical expenses that are deductible can be a variety of things.  Payments for doctor bills, dentists, specialists, and the services they provide (like x-rays, blood tests, etc.) are deductible.  You can also deduct your health or dental insurance if you are paying for it out-of-pocket.  If you get your insurance through work it is normally a tax-free fringe benefit.  The deduction is only for your out-of-pocket insurance plans.  Long-term care insurance is also deductible although subject to a limitation depending upon how old you are at the time.  Prescription drugs are also deductible, but that means you need to have a prescription.  Going to Walgreens and buying aspirin or bandages are not going to qualify even if they were recommended.

Lastly medical travel or mileage is also deductible.  If you drive down to the Mayo clinic for tests, that mileage is deductible.  For medical purposes the mileage rate is only 23 cents which is much less than the business mileage rates, but still better than nothing.

Taxes A to Z – still randomly meandering through tax topics, but at least for 26 posts in an alphabetical order

In accordance with Circular 230 Disclosure

Written by | Posted in United States