What Does the Affordable Care Act Mean to You?
Sterling Heights, Michigan (PRWEB) January 16, 2015 -- With the New Year upon us and tax season kicking into full gear, there have been lots of questions as to how the Affordable Care Act (ACA) will affect your 2014 tax filings.
On the business side of things, the majority of the new reporting deadlines have been delayed until the 2015 tax year. This means most of the new business reporting forms will not need to be filed until 2016.
On the personal side, however, there may be some new forms and reporting that may need to be completed with your 2014 Form 1040 filing.
Most taxpayers will simply need to check a box indicating they had health insurance coverage through their employer, a government sponsored plan (such as Medicaid or Medicare), or from other qualifying health insurance.
Those individuals who purchased their health insurance through the Marketplace exchange will have a few more steps to go through. Below is a summary of some of those new changes that will affect your 2014 individual tax filing.
• Taxpayers should receive in the mail Form 1095–A (Health Insurance Marketplace Statement) from the Marketplace by January 31, 2015. This will include the details needed to complete the premium tax credit and prepare the reconciliation if they received any health insurance subsidy that helped reduce their monthly premiums during 2014.
• Taxpayers will need to complete Form 8962 (Premium Tax Credit) with their 2014 Form 1040 filing using the information on Form 1095-A and their personal return.
• Taxpayers will then reconcile their calculated premium tax credit Form 8962 with the insurance subsidy received in 2014 and the difference may either be refunded or added to your 2014 taxes.
Does this mean I may owe taxes if I received too much in subsidies?
Unfortunately, yes. You may have to repay some of the subsidy money if your calculated premium tax credit is less than the amounts you received in 2014. Those taxpayers with modified adjusted gross incomes over 400% of the Federal poverty level ($45,960 for an individual or $94,200 for a family of four) will have to repay the entire amount of any insurance subsidies received in 2014. While the IRS is not permitted to pursue collection action using levied or liens for this subsidy amount, they can withhold the amounts owed (plus interest) to the IRS from future refunds for up to 10 years in the future.
What if I did not have health insurance coverage in 2014?
You will need to complete Form 8965 to determine if you may be eligible for an exemption from the individual shared responsibility penalty and, in the alternative; this form will also be used to calculate the taxpayer’s amount of the “Health Care Individual Responsibility Tax” to be reported on Line 61 of the 2014 Form 1040.
How much is the Health Care Individual Responsibility Tax?
For the tax year 2014, the individual shared responsibility payment is the greater of:
1. One percent of the taxpayer’s household income in excess of their filing threshold; or
2. A flat rate of $95 per adult member 18 and older and $47.50 for each dependent under age 18, capped at $285 per family for 2014.
For more information on the Affordable Care Act, contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us on the web at http://www.uhy-us.com.
Chris Clark, UHY LLP, +1 (586) 843-2637, [email protected]
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