The ACA Can Affect Your 2014 Tax Return
By Charles Zagara, Tax Attorney on 2015-01-19
Did you buy your health insurance from the government marketplace in 2014? If so, your tax return will be significantly more complex than last year's return because the new Affordable Care Act (ACA) will impact your taxes.
If you bought from the government marketplace, you were most likely awarded an insurance subsidy based on your estimated income for 2014. The actual subsidy is based on your actually reported family income on your 2014 tax return and how much the government thinks you should pay toward your own premiums through a very complex computation. The subsidy as calculated must be reconciled with the subsidy your received in advance to reduce your premiums, and you may be required to repay a portion of the advanced subsidy.
However, you could be entitled to a larger subsidy that is refundable on your tax return. To make matters even more complicated, if your family's circumstances changed during the year, such as through a divorce, separation, marriage, or changes in dependents, the situation becomes increasingly complicated.
There could be many problems if you don’t do your return right and lots of grief with the IRS if it is done wrong. That's why this is not the time to try self-preparation with do-it-yourself software, or to rely on part-time preparers at one of those tax mills. Taxation Solutions, Inc. has the expertise you can trust for all aspects of your tax life, from problem resolution to effective preparation. Learn more when you call us today!