AffordableHealth Care Information
Dear Valued Client,
I am writingto inform you of healthcare changes effective January 1, 2017, that may affect your 2017 tax return(filed in 2018).
The landscape of tax preparation is constantly evolving as the Federal government continues to issue mandates for both of us. The Affordable Healthcare Act (ACA) passed in 2010 is one such change. ACA mandates that certain taxpayers, including their spouse and all dependents (if applicable),must have health insurance coverageOR be assessed a “penalty.” TAXPAYERS ON MEDICARE,or HAVING HEALTH INSURANCE THROUGH THEIR EMPLOYER, or RETIREES RECEIVING HEALTH INSURANCE THROUGH THEIR RETIREMENT SYSTEM, or WHO PURCHASE HEALTH INSURANCE ON THEIR OWN ARE GENERALLY EXEMPT FROM THE “PENALTY.”
By January 31, 2018, depending on your circumstances,you may receive multiple copies of the three (3) 1095 forms listed below.If you receive any of these forms, please bring them with your tax appointment. I will need the forms to complete your 2017 tax return. They include:
- Form 1095-B (or substitute) from your health insurance company, if applicable.Thisform reflects your health insurance premiums paid, months of coverage, and person(s) covered under your plan,
- Form 1095-C (orsubstitute) from your employer, if health insurance coverage is provided. You may not receive this form if your employer has less than 50 full-time employees,
- Form 1095-A (Health Insurance Marketplace Statement) is required if insurance was purchased through the Marketplace in 2017, AND
- Any of these three (3) forms your child may receive, if applicable. If your child files his/her own return manually or uses a tax software package (e.g., Turbo Tax), please retain a copyasI will need it to complete your 2017tax return. This information is needed to calculate your “Household Income” to determine if the additional tax applies.
The monthly tax calculation is time-consuming, even more so when there is a change in your status, income, dependents, birth, or death. There is a “penalty” if a taxpayer fails to have health insurance coverage for 2017.
For 2018, open enrollment to apply for healthcare begins November 1, 2017, and ends December 15, 2017 (only 45 days to register this year), to avoid monthly “penalties.”Health insuranceis available on the internet by logging onto “healthcare.gov” or itcan be purchased from an insurance agent. Your insurance agent is a great resource if you need assistancein obtaining health care coverage.
Congress has mandated that tax preparers are responsible for determining whether the “penalty”applies,with the IRS verifyingthe calculation.
Due to the complexity and the additional time required (as with 2016),a separateline item titled “IRS Healthcare Mandate Fee”will be added to your 2017 tax return invoice.
I hope this information washelpful.
Richard E. Ayres, EA
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