How Your Refund Could Be Reduced for Health Insurance Lapse in 2014

Avoid Tax Refund Remorse

Since tax season started last week, I have had a few clients who were unaware that form 1095-A “Health Insurance Marketplace Statement” itemizes taxpayer insurance coverage reported by healthcare providers for 2014. This form should be mailed to your address of record by the IRS before 1/31/2015.

One client in particular, let’s call him “Bob” (fictitious name), was on a fixed income of pension and social security. Bob completed his filing with me and stated that he had health insurance coverage for all of 2014. I was able to find deductions for Bob that he was not aware of when he completed his own return last year. Bob left my office elated with his scheduled tax refund. Two days later, Bob received Form 1095-A from the IRS. Turns out that Bob allowed his insurance coverage to lapse for two months in 2014. What would have been a $500 refund became a $250 tax bill.

So that no more refund balloons are deflated, I have copied a link to a useful tool:

The Individual Shared Responsibility Calculator

This Individual Shared Responsibility calculator provides information on how much you and your family maybe charged for failure to have an adequate health plan that meets the minimum essential coverage based on IRS standards.  The Individual Shared Responsibility fee, or tax will increase gradually over the next three years. After 2016 the amount will be adjusted based on the cost of living. This calculator should be used as an educational tool. Please talk to your tax agent or financial advisors before making any decisions. Ihealthcareupdates.com  holds no responsibility for decision made from using this educational tool. This calculator does not provide information with regards to subsidies. Please use our Health Insurance Subsidy Calculator to calculate what your potential subsidy can amount to, through the purchase of health plan on the exchange. How to use this tool Note: To avoid any issues with your calculations. Always hit the reset button before putting in new values. This ensures the old values are not stored in your system cache. The final value provided is for 12 months of no coverage. You will only be responsible for the months you did not have coverage. Divide the final value by 12 to give you the cost for each month you failed to be properly insured.  

Copy and Paste The Link Below to Use the Calculator:

http://www.ihealthcareupdates.com/tools/health-insurance-tax-calculator

More Information Available on My Site:

www.turnertaxaccounting.com

Does the Affordable Care Act Benefit Young Adults?

As I meet independent contractors and self-employed business owners to discuss family and business needs, health insurance continues to be on the top of the list for urgency due to a lack of coverage. Young adults may have been motivated to enroll in coverage in 2014 in part due to the financial assistance available through the Marketplace.  Nearly 5 in 10 uninsured young adults who were eligible could have gotten covered for $50 or less per month and nearly 7 in 10 could have gotten covered for $100 or less after tax credits.8 In fact, among all people who actually selected plans with premium tax credits through the Federally facilitated Marketplace, nearly half had monthly premiums of $50 or less and more than 7 in 10 had premiums $100 or less after tax credits.9

Research has found benefits for young adults who gain coverage:

  • Young adults who gain coverage are less likely to face large out-of-pocket medical expenses and less likely to delay or forego care due to cost.10
  • Several studies also indicate that newly insured young adults are more likely to receive several types of inpatient and outpatient care, including preventive care like blood pressure screening, cholesterol screening, and routine physical and dental examinations.11 Another study found that newly insured young adults are more likely to report being in excellent health.12
  • Expanded access to coverage in young adulthood may also have big benefits for workers’ careers, by allowing workers to obtain additional schooling and choose the jobs that best match their career goals.13

For more information on the Marketplace, Medicaid, and CHIP visit HealthCare.gov. If you have questions or need to find someone who can help you in person, find local help at: Localhelp.healthcare.gov/. Or call the Marketplace Call Center at 1-800-318-2596. TTY users should call 1-855- 889-4325. The call is free.

Jared Turner

www.turnertaxaccounting.com

Welcome to the Turner Tax Blog

As we approach the 2014 tax season, I have received several questions about filing prior year returns. The IRS.gov website has a section designed for taxpayers to create an account that allows communication with an IRS administrative agent. With your taxpayer account, you can request tax transcripts for the past three years and ask specific questions about IRS notices that you have received. Turner & Associates, LLC has successfully negotiated lower penalties and augmented payment plans for past due fees on behalf of our clients!

Stay tuned…More to Come!

Jared