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04
Feb
15

Form 8965- Health Coverage Exemptions (Obamacare/ACA)

What is Form 8965- Health Coverage Exemptions?

The Affordable Care Act tax provision will affect federal individual income tax returns filed in 2015 for the 2014 tax year. Form 8965 is used to report a coverage exemption that is either granted by the Marketplace (also called the Exchange) or reported on your tax return. The form is also used to report any shared responsibility payments caused by you, or a member of your household, not having health care coverage or an exemption for that month.

 

Who must file this form?

If you are required to file a tax return and wish to claim a coverage exemption for yourself or another member of your tax household, the IRS requires you to file Form 8965.  On the other hand, if you are not required to file a tax return, your tax household is exempt from what the IRS calls the “shared responsibility payment” and you do not need to file a return to claim the exemption from coverage.

Premium Tax Credit - This is a tax credit for certain individuals who enroll, or whose family member enrolls, in a qualified health plan offered through a Marketplace.  This particular credit is designed to provide financial assistance to pay the premiums by reducing the amount of tax you owe, giving you a refund, or increasing your refund amount.

Individuals may be eligible if they:

  • Are not eligible for other qualifying coverage, such as government-sponsored or certain employer-sponsored coverage
  • Are within certain income limits
  • Do not file a Married Filing Separately tax return
  • Cannot be claimed as a dependent by another person

Individual Share Responsibility Provision

  • Most people already have health care coverage and will indicate this by checking a box on the return.
  • If you, or any of your dependents, do not have minimum essential coverage or do not have an exemption, you may need to make an Individual Shared Responsibility Payment when you file.
  • If you must make an Individual Shared Responsibility Payment, you will owe 1/12the of the annual payment for each month you or your dependents are without coverage.
  • For 2014, the annual payment amount is the greater of:
  • 1% of your household income that is above the tax return filing threshold* for your filing status, OR
  • Your family’s flat dollar amount ($95 per adult, $47.50 per child, Maximum amount of $285)

Coverage Exemptions

  • Individuals who do not have coverage or experience a gap in coverage may qualify for an exemption if
  • They do not have access to affordable coverage
  • They have a gap of less than three consecutive months without coverage
  • They qualify for one of several other exemptions:
  • Household income below filing threshold*
  • Certain noncitizens
  • Members of health care sharing ministry
  • Members of Federally-recognized Indian Tribes
  • Incarceration
  • Members of certain religious sects
  • Hardships
  • Gross income below filing threshold*
  • Two or more family member’s aggregate cost of self-only employee-sponsored coverage exceeds 8% of household income
  • Purchased insurance through Marketplace but experience a coverage gap
  • American Indian, Alaska Native or a spouse or descendant eligible for services through an Indian health care provider
  • Experienced homelessness, eviction, foreclosure, domestic violence, death of a close family member, unpaid medical bills that prevented you from obtaining coverage.
  • Do not have access to affordable coverage based on projected income.
  • Ineligible for Medicaid solely because the State does not participate in the Medicaid expansion under the Affordable Care Act.
  • Your have been notified that your health coverage will not be renewed and you consider other plans unaffordable.
  • Exemptions can be obtained in several ways. Some are from the Marketplace in the area where you live, others only from the IRS when you file your return, and others can be obtained from either the Marketplace or the IRS.

 

 

Filing Thresholds for Most People: And your age is:   Then you must file a return if your gross income is more than:
Single               Under 65 $10,150
   65 or older $11,700
Married filing Joint                            Under 65 (both spouses) $20,300
   65 or older (one spouse) $21,500
   65 or older (both spouses) $22,700
Married filing Separate  Any age $3,950
Head of Household  Under 65 $13,050
   65 or older $14,600
Qualifying Widow(er)  Under 65 $16,350
   65 or older $17,550

 

 

If you, or a member of your household, was granted a Marketplace exemption, complete Part I of Form 8965.

If you are claiming a coverage exemption on your tax return, complete Part II or III. You may need to complete more than one part of Form 8965.

 

27
Jan
15

‘Affordable’ Health Care information basics

Exemptions apply but you’ll need and Exemption Number from the exchange.Impossible_Seat[1]

Bring info to your tax appointment such as: 1095, history of months covered, etc.

03
Feb
14

EXPIRING TAX PROVISIONS – Many changes

 

Although the American Taxpayer Relief Act (ATRA) reduced uncertainty by permanently extending many of the tax cuts first enacted in 2001 and 2003 (Bush era tax cuts) there are dozens of provisions originally due to expire at the end of 2011 or 2012 that were temporarily extended until the end of 2013. Those which will expire on December 31, 2013 include the following:

    • State and Local Sales tax – Taxpayers can elect to deduct state and local sales taxes in lieu of state and local income taxes.
    • Mortgage insurance premiums – Allowed to be taken as qualifying residence interest payments
    • IRA Distributions to Charity – Tax free distributions, up to a maximum of $100,000 per taxpayer from IRA’s to US public charities by taxpayers aged 70 plus 6 months or older, have been allowed as an alternative to take an itemised deduction.
    • First year expensing of qualifying assets – The $500,000 limit for the immediate expensing of qualifying assets (non-real property-tangible assets purchased during the year) costing no more than $2,000,000 will reduce to $25,000 with phase out starting at $200,000.
    • Deduction for tuition and fees – expires as of December 31, 2013.
See the exhaustive outline of changes here:
08
May
13

Many Early Tax Filers Still Waiting for Refunds

Taxpayers claiming education credits on Form 8863 encountered their first delay when the IRS said it wouldn’t be able to start processing the forms until mid-February because it needed to update its systems. Then, on March 12, the IRS said several tax software providers erroneously filed more than 600,000 returns containing the 8863 form –resulting in delays of up to six weeks from the date they were filed.

That meant most of these filers were expecting refunds by the end of March or beginning of April at the latest.

But since then, hundreds of angry comments have been posted on Facebook and other online tax forums from filers who claim they still haven’t received their refunds.

story

09
Apr
13

NEW: Home Office, Medicare Tax – 2013

Under new IRS rules, taxpayers will be able to use a simple formula based on the size of their home offices. The streamlined method, available for 2013 returns, lets taxpayers deduct $5 per square foot, up to a maximum of 300 square feet, or $1,500.

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There is a 0.9% increase in the Medicare tax on wages and self-employment income….S-Corp pass thru may be included.

Taxable fringe benefits—such as personal use of a company car or airplane—are subject to the 0.9% tax for employees.

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http://online.wsj.com/article/SB10001424052702303684004577509112641512828.html

05
Feb
13

Taxman plays doctor

“……. The extent to which one is eligible for federal subsidies to buy insurance, and the penalties for failing to comply with the mandate, will both be determined using one number: the adjusted income reported to the Internal Revenue Service this year…..” story

11
Jan
13

Is a Self Directed IRA right for you ?

I recommend you take a look at our SD IRA page on RealtyNetWorth.com.

This can be an excellent way to roll existing retirement funds or use future IRA deposits to make hands on real estate investments. You pick the property and we broker the buy/sell activities. We have many professionals in the referral network to assist if/when needed from setup with a MI based trustee to CPA’s, property inspectors, etc.

If you want to enter the market but don’t have free funds outside of retirement accounts, this may be a good option for many – especially if you are younger/ have a % to set aside for this type of investing/ or are interested in property with a bit of knowledge regarding repairs and care of homes.




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