SACRAMENTO, Calif., Nov. 17, 2014 /PRNewswire-USNewswire/ -- Due to the impact of the Affordable Care Act (ACA), filing your taxes may be a much more complicated process than in previous years. The IRS is charged with implementing the numerous tax-related provisions of the ACA, and IRS Commissioner John Koskinen recently predicted that the 2015 tax filing season "will be one of the most complicated filing seasons we've ever had." Taxpayers need to take note of recent significant changes in order to be prepared for the upcoming tax season.
Starting in 2014, the ACA individual shared responsibility provision calls for every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. All U.S. citizens living in the United States are subject to the individual shared responsibility provision, including children and senior citizens, as well as all permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes.
Taxpayers who don't have coverage, or who have it but want to find out about other options, can get health insurance coverage through the ACA Health Insurance Marketplace. As part of the ACA Marketplace, eligible taxpayers have the option of receiving a subsidy to help pay their monthly health insurance premiums, known as the premium tax credit. Eligible taxpayers can choose to have the credit paid in advance to their insurance company to lower out-of-pocket costs for monthly premiums, or they can claim all of the credit when they file their tax return for the year.
Eligibility for the subsidy is based on estimated household size and income. Generally, individuals and families with estimated household incomes for the year between 100 percent and 400 percent of the federal poverty level for their family size are eligible for the premium tax credit subsidy.
One person: household income between $11,490 and $45,960.
Family of two: household income between $15,510 and $62,040.
Family of four: household income between $23,550 and $94,200.
In addition to meeting the household income requirement, taxpayers must meet other eligibility requirements such as not being able to get affordable coverage through an eligible employer plan that provides minimum value, not being eligible for coverage through a government program like Medicaid, Medicare, CHIP or TRICARE, and not being claimed as a dependent by another person.
But those taxpayers who chose to have the credit paid in advance will have to reconcile the amount paid in advance with the actual credit computed when they file their tax return. Thus, if the actual 2014 household income exceeds these amounts and a subsidy was granted, the subsidy would need to be repaid on the 2014 federal tax return.
Because of these extensive tax implications, tax professionals have become the go-to experts on the ACA. Even those taxpayers who routinely prepared their own taxes in past years should consider utilizing the services of a tax expert such as an enrolled agent. Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years. To find an enrolled agent in your area, call 800-TAXPRO-5 or visit the California Society of Enrolled Agents website at www.csea.org and click on "Find an Enrolled Agent Near You."
The California Society of Enrolled Agents (CSEA) is an association of more than 3,500 federally licensed tax professionals that offers Californians guidance in choosing a tax professional to assist them with tax planning, preparation and representation. Enrolled agents (EAs) advise and represent their clients on all matters of taxation throughout the year, not just during tax time. If you have tax questions, your enrolled agent can assist you in ensuring that you do not pay too much, and help you minimize your risk of an audit. Visit www.csea.org or call 1-800-TAXPRO-5 to find an enrolled agent near you.
Available Topic Experts: For information on the listed experts, click appropriate link.
Joseph Calderaro, EA
ProfNet - https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=99432
Dave Shaw, EA
ProfNet - https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=114183
Raven Deerwater, EA, PhD
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Patricia Kappen, EA
ProfNet - https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=114182
Lonnie Gary, EA, USTCP
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Jean Nelsen, EA
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SOURCE California Society of Enrolled Agents