Thursday, January 2, 2014

Tax Preparers Gearing Up for Affordable Care Act Tax Law Changes

Professional tax preparers are busy learning the new laws set in place for January 2014 for the Affordable Care Act. The published updates are filled with technical words and complex explanations and might confuse the average tax payer. Having a trusted tax preparer on your side will make the compliance forms that much easier to fill out.
As a tax payer, you will need to use the rest of the 2013 year to make sure you have health insurance. People who do not have health insurance will be issued a fine unless you fall into one of the groups of people who are exempt from the new law.
*If you belong to a religious group that does not accept health insurance policy benefits.
*Undocumented immigrants
*Those in prison.
*If you are a member of an American Indian tribe and receive your health care from IHS.
*If your family income does not require you to pay taxes ($9,750 for an individual or $12,200 for a family documented for 2012).
*If more than 8% of your income for health insurance is paid by you. This does not count any tax credits or what your employer pays.
If a tax payer does not fit into one of these groups of people and does not have health insurance come tax time, there will be penalties. Beginning in 2014, there will be a $95 penalty for every adult and $47.50 per child.. There will be a $285 penalty limit per family or a 1.0% cap of the household income, whichever is greater.
Come 2015, the penalties will increase. Each adult will now have to pay $325 and $162.50 per family with the limits set at $975 per family or 2.0% of the household income. Once again, the greatest cost between those two will be the penalty requirement. Come 2016 adult penalties will rise to $695, a child $347.50, family limit $2,085 or 2.5% of the household income. After 2016, the penalty amounts will increase annually based on cost of living.
Tax payers will be required to inform the IRS of their health care status on a new form filed with their tax return. This form will require you to name the insurance company, what kind of health care plan it is and list the months out of the past year that you were covered. No health care plan equals a penalty payment which was described above. Prorated amounts will apply if you were not covered for more than three months for the full year; less than three months carries no penalty.
The IRS will receive information from the health care provider in order to confirm the reported information. You must have at least the minimum essential coverage:
*Ambulatory services or outpatient clinic service equivalent
* Emergency services
*Hospitalization
*Maternity care for mother and newborn care
*Mental health and substance abuse disorder services
*Rehabilitation services and devices. This includes physical and occupational therapy and both hearing and vision aids.
*Laboratory services
*Preventative and wellness service as well as management for chronic diseases.
*Pediatric services including dental and vision.
Health care officials have been notified that the plans they sell must comply with the new standards. You may qualify for government financial assistance for health coverage.


Article Source: http://EzineArticles.com/7978919

No comments:

Post a Comment