Health Care Penalties In 2015: How To Avoid Obamacare Fee And Report ... - International Business Times
International Business Times
Health Care Penalties In 2015: How To Avoid Obamacare Fee And Report ...
International Business Times
The fine is part of President Barack Obama's landmark law that requires all taxpayers to divulge their health insurance status to the Internal Revenue Service when filing their federal income tax returns. People who qualify for an exemption can avoid ...
Obamacare tax surprise looming
This will likely lead to some very unhappy Americans. Those who underestimated their income either will receive smaller tax refunds or will owe the IRS money. ... So you'll have to reconcile the two with the IRS during the upcoming tax filing season ...
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Wall Street Journal
Affordable Care Act Creates a Trickier Tax Season
Wall Street Journal
The law's requirement that most Americans carry health insurance means all filers must indicate on federal tax forms whether they had coverage last year and got tax credits to help pay for it. Those who didn't have coverage could face a fine, although ...
Affordable Care Act causing changes to 2014 taxesWISC Madison
Obamacare Penalty 2015: Health Insurance Fines to Increase Varying on ...Latin Post
Are you an Obamacare Insurance scofflawCommunities Digital News
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Happy New Year from the Affordable Care Act!
You probably haven’t even yet seen the individual mandate from the Affordable Care Act on an actual tax form. Unless you’ve been looking at the new 1040 (and I hope, gentle readers, that most of you had better things to do with your holidays) you haven’t yet seen the mandate in action. It’s on line 61, and it results in extra tax liability if you failed to obtain health insurance coverage for part of the year 2014.
However, it’s also worth remembering that the penalty will be doubled (or more than doubled) for 2015. 2014’s penalty is $95 or 1% of your household income, whichever is higher. 2015’s penalty is $325 or 2% of your household income, whichever comes higher.
If you are covered only for part of the year, you are assessed 1/12 of the annual penalty for each month that you were not covered.
My impression of the 2014 penalty is that it was relatively toothless for a lot of taxpayers, both because of its relatively low amount and because I expect hardship exemptions to be given out relatively generously. I don’t expect the 2015 penalty to be similar.
For a long time, squabbles over the individual mandate seemed like a far-off, abstract thing. That’s no longer the case. The individual mandate now has real consequences, and it should be taken seriously by taxpayers and policymakers alike.
Jail time given for filing taxes as the dead
U.S. District Judge Michael Barrett sentenced Christopher Smith after the man was convicted of filing false federal income tax returns with the Internal Revenue Service. Smith has also been ordered to pay $9,344 to the IRS. Between February 2012 and ...
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11 year-end tax strategies to use before Dec. 31
This can include property taxes as well as estimated state taxes that can be deducted on a federal tax return. If you prepay your estimated taxes before April, you can deduct that tax payment in some ... The reasoning is that you deferred taxes on ...
Deducting medical and dental expensesYourWestValley.com
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An important piece of the Affordable Care Act is its subsidies for health insurance premiums. These subsidies are meant to help low-income families afford health insurance that they purchase from the health insurance exchanges. The Affordable Care Act provides these subsidies through the tax code as a refundable tax credit called the Premium Tax Credit (PTC).
The PTC is provided to taxpayers with incomes between 100 and 400 percent of the federal poverty level (between $23,850 and $95,400 for a family of four). Those with incomes below 100 percent are eligible for Medicaid. The size of the credit is based on a taxpayer’s income and the cost of their health insurance plan.
Taxpayers don’t directly receive the PTC. Instead, the PTC is sent directly to the insurance company and results in a lower monthly insurance bill for the taxpayer throughout the tax year. This is in contrast to tax credits such as the Child Tax Credit, which is given to taxpayers as a lump sum each year when they file their taxes.
Because taxpayers receive the credit before they file their taxes, it requires them to guess their income for the coming year in order for the IRS to send the correct payment to the insurance company. This can be problematic.
For some taxpayers predicting future income may be very challenging and anyone is bound to guess wrong. Someone may get a raise mid-year or pick up a second job, altering their income. This means that the credit the insurance company is receiving each month from the IRS is too much.
If this happens, it puts the taxpayer in the awkward position of paying back the IRS for the excess credit it sent to the insurance company at the end of the year. When the taxpayer files their taxes (with their actual annual income from their W-2), the IRS will adjust the taxpayer’s tax refund (or increases their tax bill) in order to get the excess money back that it paid to the insurance company.
Of course, the opposite is true. If a taxpayer ends up losing a job, or his hours are cut back, their income and thus their credit during the year was smaller than it should have been. In this case the IRS sends the adjustment to the taxpayer in the form of a larger end-of-year refund (or reduced tax bill).
Adjustments to a taxpayer’s tax bill at the end of the year are certainly not a new concept (a tax refund itself is an adjustment for overpaying your taxes during the year). However, the ACA’s premium tax credit is a new and less understood provision that could affect many taxpayer’s tax refund or tax bill. The PTC is definitely not an ideal system and it could get messy for the taxpayers, especially for those that have hard-to-predict incomes.
The IRS has officially announced that tax filing season will begin on January 20, 2015. At Forbes, Kelly Phillips Erb notes that this is actually a week and a half earlier than the start dates for 2013 and 2012.
This is a remarkably fast turnaround, given that the tax code for 2014 was in flux right until the middle of December, when the extenders bill was finally passed. Part of the reason the IRS can handle the last-minute extenders bills so easily is that it has become wearily predictable at this point; Congress always renews these at the last minute, and the IRS actually even held lines in the draft 1040 open for the extenders.
Needless to say, this is no way for Congress to set tax policy. The tax policy for 2014 should have been complete by the beginning of the year, not the end. But the IRS deserves some credit, here, for handling the unreasonable demands of Congress. A good New Year’s resolution for Congress would be to treat the tax code more responsibly in the future.
With 2015 comes a number of state tax changes effective January 1:Arizona’s corporate income tax drops from 6.5 percent to 6.0 percent, as part of multi-year package reducing it to 4.9 percent by 2018. Illinois’s income tax drops from 5 percent to 3.75 percent, and its corporate income tax drops from 9.5 percent to 7.75 percent, as temporary increases enacted in 2011 partly sunset. Indiana’s income tax drops from 3.4 percent to 3.3 percent. Some county income taxes drop too. (The corporate income tax cut from 7 percent to 6.5 percent takes effect July 1, 2015.) Massachusetts’s income tax drops from 5.2 percent to 5.15 percent, as part of an automatic provision triggered when state revenue growth exceeds certain thresholds. Nebraska begins indexing its tax brackets for inflation for the first time, part of a package passed in 2014. New Mexico’s corporate income tax drops from 7.3 percent to 6.9 percent. Further reductions are scheduled to happen in future years, ultimately dropping the rate to 5.9 percent by 2018. New York repeals one of four calculations required to pay corporate income tax, the alternative minimum tax base, and expands net operating loss carrybacks to three years and removes the cap. The changes are the first to take effect of a larger corporate tax reform that in future years will drop the rate from 7.1 percent to 6.5 percent and repeal a second base, the capital stock base. Also on January 1, 2015, the capital stock rate for manufacturers drops from 0.15 percent to 0.132 percent and fixed dollar tax for manufacturers drops as well. Effective April 1, 2015, the estate tax exclusion rises from $1 million to $2,062,500. The New York Business Council yesterday urged making the property tax cap permanent; currently it is scheduled to expire on June 15, 2016. North Carolina continues phasing in elements of its historic 2013 tax reform package, dropping the individual income tax rate further to 5.75 percent (it was 7.75 percent in 2013 and 5.8 percent in 2014) and the corporate tax rate to 5 percent (it was 6.9 percent in 2013 and 6 percent in 2014). The state this year approved further reforms, dropping a complicated state calculation of net economic losses and instead aligning with federal net operating loss rules. Ohio reduces its carveout for pass-through businesses from 75 percent to 50 percent. (It was temporarily increased to 75 percent for 2014 only, as part of a package that accelerated an income tax cut, increased the EITC from 5 percent to 10 percent, and increased the personal exemption for low-income taxpayers.) Pennsylvania’s capital stock tax drops from 0.067 percent to 0.045 percent. The tax was scheduled to expire in 2014 but policymakers keep extending it. Incoming Gov. Tom Wolf (D) has pledged to repeal it, although he’s also discussed raising income taxes. Rhode Island’s corporate tax rate drops from 9 percent to 7 percent, and they implement single sales factor apportionment. West Virginia’s franchise tax is repealed. This tax on business investment has been reduced over time as the state rainy day fund met certain thresholds. District of Columbia: Several more components of D.C.’s 2014 tax reform package take effect: Income between $40,000 and $60,000 will be taxed at 7 percent instead of the current 8.5 percent. This rate will drop further to 6.5 percent in 2016 if enough revenue is available to trigger the reduction. The standard deduction increases to $5,200 for singles, $8,350 for married couples, and $6,650 for heads of household Some income tax credits are eliminated, including the low income tax credit, District employee homebuyer tax credit, long-term care insurance deduction, and government pension exclusion Business tax (corporate income tax and tax on unincorporated businesses) is cut from 9.975 percent to 9.4 percent. The reform phases in further reductions in future years, aiming to bring the tax rate to 8.25 percent, equivalent to Maryland’s 8.25 percent rate and closer to Virginia’s 6 percent rate. The earned income tax credit for single childless workers rises to 100 percent of the federal credit. The Washington Post details the sequence of 17 future tax reductions to take effect as revenue thresholds are met. Contrary to that article, D.C.’s elimination of several sales tax carveouts (including on gyms and yoga studios) already took effect, on October 1, 2014. Those groups proposed preserving their sales tax carveout by raising the business tax on all businesses to 9.55 percent in 2015, but that effort failed.