January 12, 2015
In an effort to consistently keep you informed and updated on regulatory changes that may affect your tax outcome, we want to provide you with much-needed information about the Affordable Care Act (ACA) and the impact on your 1040 tax return in 2014. As you recall, Congress passed the Affordable Care Act (commonly referred to as Obamacare) in 2010. To date, ACA has not had a major impact on individuals; however, in 2014, ACA was put into full effect. This means that there will be several effects on every tax payer this year - considering the requirement that all Americans of all ages must obtain qualified health insurance for the entire year. The requirement to obtain health insurance applies to you individually as well as to anyone you claim as a dependent on your return.
Please note that several new forms will be issued to taxpayers this year, primarily Form 1095-A, B, and C. To complete your 2014 return, SBDP staff must have all copies of Form 1095, as they offer us the necessary information to report your health insurance coverage, calculate any credit, and calculate any penalty that may apply. It is important to understand as well that because much of the reporting for 2014 will be voluntary, it’s not guaranteed that you will receive Forms 1095 automatically. If you do not, it’s imperative that we obtain the following information from you:
Avoid Tax Mistakes in 2014!
Of equal importance for 2014 is the high potential for tax mistakes - likely to be made primarily by dependent children who work in 2014. To avoid costly mistakes, first, do not allow any dependent children to file their own return, particularly college students, and do not file them yourself. It’s best to have our expert team file these returns for you to protect you from inadvertently losing thousands of dollars in potential health care tax credits. The IRS recently released new Form 8962 to calculate the credit, and we know first-hand the difficulty level in calculating the credit and; therefore, the high risk for error.
For those of you who have received an advanced payment of the Health Care credit by purchasing insurance through the Exchange, we also want to alert you that if you received a greater credit than allowed, you will be forced to repay the excess with this year’s return. We encourage you to visit Healthcare.gov for details.
This tax season is an important one for many business owners because it’s the first that will be impacted by the Tax Cuts and Jobs Act (TCJA). How big of an impact is dependent on your unique situation. We’ve compiled this short list of provisions that may affect the business community:
According to Forbes.com, Super Bowl viewers traditionally load up on millions of pounds of less-than-healthy foods during the big game—including ribs, pulled pork, tortilla chips, nuts, popcorn and bacon—all washed down with beer (the Super Bowl beverage of choice). If you are trying to stick to your New Year’s resolution to eat better, consider a few healthy substitutes for the traditional Super Bowl eats:
The combination of running a business and your life and preparing for tax time can drive some people into a slight panic. But no need to get stressed if you are prepared. Now is the time to start organizing all documents required to file your tax return.