RWH Tax Preparation

 Accurate and On Time

   Home      Affordable Care Act (Obamacare)
To avoid increased taxes due to penalties for lack of healthcare coverage, taxpayers must supply proof of coverage or proof of an approved exemption. Healthcare coverage  may be obtained in one of three ways: Marketplace, Insurance Company, Employer. Listed below are the options and what each means in the proper preparation of your 2014 tax return. 

Coverage through Federal or State Healthcare Marketplace (Exchange)

If you chose to obtain healthcare coverage through a Federal or State Marketplace, you will receive a form 1095-A from the exchange. Click here to see a sample of the form. Do not attempt to have your taxes prepared until you receive this form. the form will list each member of your family covered during the year, any subsidies received, and the months of coverage. Your tax preparer will use Form 1095-A to complete Form 8962 and/or 8965 to determine any overpaid or underpaid subsidies based on income levels. If you received lower subsidies than you were qualified to receive, the additional subsidies will result in either an increased refund or a lower amount of tax due. Without Form 1095-A, we cannot complete your tax return. If you do not receive your 1095-A by January 31st, contact our office for instructions on how to proceed.

It is important to note that any subsidies and any penalties are calculated based on household income. This includes the income of not only the parents, but also the income of any dependents required to fie a Federal tax return. Due to this, it is imperative that the tax information for everyone listed on the return be made available to the tax preparer.

Coverage Purchased Directly from an Insurance Company

If you chose to purchase healthcare coverage directly from an insurance company, you may receive a Form 1095-B. Click here to see a sample of the form. The form will list each member of your family covered during the year and the months of coverage. If you do not receive Form 1095-B by January 31st, contact your insurance company to request that the form be sent to you. If you are unable to secure the form, bring proof of insurance coverage with you when you see your tax preparer. Do not simply bring an insurance card, as this is not proof of the months covered. Along with the insurance card, bring documentation showing payment of premiums. These payment proof documents may show monthly, quarterly, semi-annual or annual payments. It is critical that you are able to show proof of coverage for each and every month of the year to avoid additional taxes. If you do not receive your 1095-B by January 31, or if you are not sure what proof documents are required, contact our office for instructions on how to proceed.

Coverage through an Employer

If you obtain healthcare coverage through an employer, whether your employer or your spouse's employer, examine box 12 of your W-2 for code DD. This is the code that indicates that you have healthcare coverage through the employer. If you were employed for fewer than 12 months, you will need to provide proof of insurance for the months the employer did not provide healthcare coverage. If your employer has fewer than 250 employees, they are not required to report a code DD amount on the W-2. If an employer provides healthcare, and there is no code DD in box 12 of your W-2, you may receive a Form 1095-C from the employer. Click here to see a sample of the form. The form will list each member of your family covered during the year and the months of coverage. If the employer has chosen not to provide Form 1095-C, do the best you can to provide proof of insurance coverage. As your tax preparer, we will trust your statement of coverage, but any proof documents will be most helpful in any audit situation that may arise. If you do not receive your 1095-C by January 31, contact our office for instructions on how to proceed.

Exemptions to Penalties for Lack of Healthcare Coverage

Certain individuals are exempt from penalties for lack of healthcare coverage. Below is a list of exemptions. There are many factors used in determining exemptions, so if you believe that you may be eligible for exemption, please contact our office for instructions on how to proceed.

1. Members of religious sects recognized by the Social Security Administration as opposed to any private or public insurance
2. Members of healthcare sharing ministries
3. Individuals who are not US citizens or nationals who are nonresident aliens or are in the US illegally
4. Incarcerated individuals, other than those who are incarcerated pending the disposition of charges
5. Members of Indian tribes
6. Individuals with short coverage gaps...a short coverage gap is a continuous period of less than three months
7. Individuals whose household income is below the threshold for having to file an income tax return
8. Individuals who cannot afford coverage...defined as those whose premiums exceed 8% of household income
9. Individuals with a hardship exemption certificate

 RWH Tax Preparation---2585 Privada Dr---The Villages, FL 32162---(484) 437-4395