Chowdahead

Client repaid $8,000 in unemployment benefits in 2014.  He says an official from unemployment told him he has to report it on his income tax return, but that he would not be issued a 1099-G because he didn't collect benefits in 2014.

I know that on the 1099-G there is a box for repaid benefits.  However, ATX won't e-file the 1099-G unless there is at least $1 in benefits received.

Anyone know if this money needs to be reported?  I don't see any tax benefit or liability for him in doing it.

Why are you guys e-mailing any returns with the ACA question being in yellow?  I always resolve that question by either asking the client if they had full year coverage, or selecting the appropriate exemption or calculating the Shared Responsibility payment on the the 8965,

I haven't needed to use the 8962 yet because I have yet to have a client with the 1095-A.  I told them all to wait until they receive the form after Jan. 31..

I have a client who drove for Uber for a few months.  He doesn't know if they will be giving him a 1099-MISC or not.  He is trying to get in touch with them.

My guess is no, because Uber simply collects their commission from the fare and passes the rest of the funds to the driver.  Of course even if the driver doesn't get a 1099, they are still liable to report the earnings.

Has anyone here dealt wit an Uber/Lyft driver yet?

I am posting this in general chat because this is about general handling and processing of returns and not really a question specific to the ACA.  This season will be tough enough without the added delay in collecting fees or having to explain to clients why they haven't received their refunds. Be sure to double check this before finalizing the returns for filing:

 

If returns are filed with line 61 blank and no form 8965 or 8962 is included (totally "silent" for the ACA), the IRS will pull the return for error resolution and any refund will be delayed.  If this is an ERC or Fee Collect return, the preparer's fees will not be collected if the IRS chooses to mail the refund as a paper check later, rather than as a direct deposit.   This was posted to the ATX blog earlier in January.

That's a bit different than a couple weeks ago when they were saying the taxpayer wouldn't get a refund for 3-4 months if the 8962 wasn't present and the person received the APTC.

I tend to include the state refund in the Fee Collect just in case something like this happens (offsets, etc).  ATX charges the same fee.So it's a little insurance.

How is the IRS going to even hope to enforce the ACA requirements?  Most people are simply going to check' full year coverage' on the 1040.   Do health insurance companies have to file anything with the IRS that indicates who had coverage during which months in 2014?  Not to mention coverage for dependents, plus the partial year coverage scenarios, and all the exemptions.  So many exemptions.....

For the advanced premium tax credit I can understand how it's simple determine if someone received the credit, and confirming if the person had coverage all year.  But for everyone else, it just seems unbelievable that any of these can even remotely be enforced.  

Back to the point of the OP, the price TT charged for that return is in line with what my fee would be on a similar return, including fee collect.

 

Tom

Newark, CA

Except the client did the work themselves.. and hopefully did an accurate job.

Via an IRS ACA Webinar today, both are correct with the EXPLAINATION that all exemptions can be applied for; when DOING THE RETURN (you just need to complete the HHS form/application and mail it in, and then simply MARK PENDING on the tax return (8965) being submitted.  THIS IS WHERE the IRS sets aside the form when received and waits to process until the HHS either issues or does NOT issue the exemption --- THEN the ORS finishes processing the return and issues refund, etc.

 

If HHS application done before hand (typical answer time before tax season was about 4-5 weeks) you get processed when tax form submitted --- if HHS application applied for when tax return is filed --- who knows how long before the tax return gets the exemption matched between the IRS and HHS and then still needs to get IRS processed????

I don't believe the "Unaffordable Coverage" requires any paperwork for HHS.

However, I was wrong in that you can use the average national bronze level plan.  The average cost is only used to calculate the penalty.  You have to use actual cost to calculate the Unaffordable Coverage exemption, plus you have to factor in the subsidy.  So it's a real pain to figure out, and it's likely the client would have qualified if they had bothered to apply.

Thank you.

 

That means that in the case of this couple, they don't need to worry about their U.S. Children having insurance as long as the parents are Exempted.

 

I wonder how in the same 1040, you can have a credit and a penalty entries.

Well I wouldn't say they don't ave to worry about it.  They just don't need to indicate it on the 1040.  Sounds like It is assumed the child had the required coverage, is they way I read it.

But again, what are the chances the IRS is going to go after two ITIN holders for the fine for their U.S. Citizen child not having coverage....

Under Part III of the Individual Exemptions did you select both filers and indicate Exemption C for the entire year for both of them?

But if they have kids who are US Citizens, I believe they must still have coverage...

Sorry, looks like they are exempt since the ACA treats them as non-residents, regardless of what the claimed to obtain their ITIN, because they are not eiligible to buy afforable coverage.

But if their kids are citizens, I believe they still need coverage.

It looks like they are exempt, based on interpretation of the law by the National Immigration Law Center.

http://www.nilc.org/itinfaq.html

So for the heck of it I offered to help a cousin of mine and his wife file their return though turbo tax because I was curious as to what the experience was like and what I am up against.  It's pretty simple return, MFJ, one income, education expenses, one dependent.  Getting EIC and Child Tax Credit. The experience was pretty shocking.

First of all, it was not fast.  It took me almost just over an hour to get it done.  I probably could have done it 50% faster because I know all of the forms and rules like the back of my hand, but I read through pretty much all of the material presented because that's more than likely what the average taxpayer would do.  I will admit that I skimmed some areas that I am already very familiar with so it would probably take the average person even longer.

Here were my findings:

1. It was absurd how little evidence is required to claim dependents or the EIC or child tax credits.  Underneath the dependents name is basically several bullets that ask you of this dependent lived with you for more than 6 months, etc. I almost overlooked it.  So while we have to detail with the 8867 and all the ramifications of that, Turbo Tax s allowed to simply put up a few bullet points.
    
2. Claiming education credits didn't require a 1098-T or even the educational institution EIN.  Turbo Tax just said the TP should receive it by Feb 15.  He had one but it didn't require one because initially it let me go on without entering any info on the school other than the name, and it gave him the American Opportunity Credit.
    
3. I am an experience preparer and I found it complex, as it should be because taxes are complex by their nature.  But I cannot understand how an average person cold understand half of the material and make an informed decision.  There are so many links and popup windows to sift through.  There is dumbed-down language but even still, I can't see the average person just skimming through.
    
4. The questions on the ACA were absurdly simple.  It asked did you pay for health coverage?  No.  Did you apply for health insurance through a state or federal marketplace or receive Medicaid?  Yes.  That's it.  No more questions on that.
    
5. It wasn't cheap.  The total cost of the return, including the state, was $119, and that was with a 30% "discount".  To have the fees deducted from the refund, the total cost was $154.00.  Total time for preparation, about 70 minutes.  I'm pretty sure it would have taken a non-tax person about 90-100 minutes minimum.  And this was for a simple return.  The TP has to print the return themselves.  I cannot understand why people bother.

What I did like was how Turbo Tax offered options to track the refund by email or text message alerts.  There is an estimated refund date.  There is also a status bar showing the status of the return (i.e. transmitted, received by IRS, Refunded, etc).  

I like these options.  I'd like to know why ATX hasn't incorporated some of this in the program.  I'd probably be willing to pay for such a service because I think clients would like them.

I believe I figured it out, under form 8965, Part III one would choose "C" = citizen living abroad or certain non citizens, does this sound correct? Anyone

Residency for tax purposes if different than residency for work purposes.  If the person has an ITIN, they most likely applied for it on the W-7 claiming that they are a "resident" of the United States based on number of days present in the United States.

So in my view, if that's the case, they may still be required to have health insurance.  They do not qualify for the Advance Premium Tax Credit if they have an ITIN.  They do not qualify for Medicaid (but their kids do).

Fortunately, most of these people make low enough wages that they will qualify for the unaffordable coverage exemption.

You are correct. The exemption can be applied for through the Marketplace and if it was not, then it can be claimed on the tax return.

There are two types of exemptions.  One is Unaffordable Coverage.  The other is Hardship.

Unaffordable coverage is simple (I am speaking relatively here ). If the national average cost of a bronze level plan is more than 8% of household income, then it's considered unaffordable.  I believe, the 8965 in ATX tells me how much the national average cost of a bronze level plan is right  on the form.  This is calculated by the preparer and can be claimed right on the 8965.

Hardship exemption must be obtained through the state marketplace (or federal of no state marketplace exists) and it can be granted for a myriad of reasons (eviction, medical bills, etc).  This exemption must be applied for in advance and the marketplace will issue an ECN code to be entered on the 8965.

Take a look here to see if this will work for you:   http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/premiumdata/databook.aspx?

 

Also, here is (bottom of page) the average "bronze" plan (2015); if you need the earlier there is a "pointer" there for where to look/figure 2014 too.

 

   http://taxpolicycenter.org/taxfacts/acacalculator.cfm

Your second link is exactly what I am looking for. Thanks!!

Keep in mind that plan costs are location sensitive.  Even down to county specific.  There is no generic amount to be used.

I believe we must use the "national average" premium for a bronze-level plan.  So I don't have to look up location specific plans.  Correct?

There was a post on ATX board regarding how to print a 2nd copy of the engagement letter when printing the 2013 organizer.

A respondent suggested simply copying the letter in its entirety, add a page break and then paste the original engagement letter to the letter.

I never did locate a page break button or command in the edit routine, so I simply hit the enter key and added lines until the letter printed on 2 pages.

I share this as a possible answer for you to consider:

Save the current version of your Federal letter as a customized template labeled "short version"

Edit the Federal letter master form by copying and pasting all those customized letters and forms to the Federal letter as additional pages. This will force the program to print out the customized letters and forms for every client.

To a smaller extent I've used this approach to enter the Privacy Policy wording I want included in my letters.

It was easier to me than trying t edit the Policy paragraph verbiage in the ATX template....

This may work for me.  I'll see which way is more efficient. Thanks!

I am trying to determine what bronze level coverage costs so I can determine if a client with an AGI of $13,000 with and 2 dependents qualifies for the "coverage unaffordable" exemption.  I highly assume that she does, however I'd like to see what the costs are based on household size so I can look it up for future clients.

ATX doesn't make any mention of the amount.  Anyone here using a specific web page or calculator to look this up?  I wish ATX calculated this for us...

I created a couple of custom letters/documents that I want each client to sign prior to e-filing their return.  I can add them to each return manually, but I'd like each new return to contain this document.

In the setting I noticed that only 5-6 letters can be added automatically to each return, including the Engagement Letter.  As a work around, I could always modify a couple of these, but I'd rather use mine that has a custom name.

Anyone know of a way to add a custom letter to each return automatically?

Not sure if it's applicable but there is a mention of it in the exemptions.  Of course, residency for tax purposes is different than for immigration purposes so I'm not sure.

From the 8965 Instructions:

 

Not a U.S. citizen, not a U.S. national, and not an individual lawfully present in the U.S. For

more information about who is treated as lawfully present for purposes of this coverage

exemption, visit healthcare.gov.

Please refresh my memory, but based on the worksheet in the instructions   can the Shared Responsibility Payment may be prorated by the number of months that the person didn't have insurance in 2014?

I attended a seminar otha covered some of the ACA and I must admit that some of the aspects of the 8962 seem like they could get tricky.  For example, lets say a single mother applies for family health insurance through an exchange, but gives the exemption to the non-custodial father on form 8332.  

How does the father avoid a penalty, since the child is covered under his mother's policy?  And how will the mother's Advanced Premium Tax Credit be calculated if she is not claiming the exemption for the child on her return?  Won't her refund actually be larger than it should be?

Or let's say at the beginning of 2014 a father of two teenagers applied for family insurance coverage though the state exchange.  Yet one of the teens ends up working a lot more than expected or even moving out of the house later in the year so the father won't claim him.  However, the APCT was being received all year for all three people.  How will this affect the return if the teen is no longer a dependent, and actually does his own return on a 1040-EZ?

Won't the APTC actually force taxpayers to file with all the dependents for whom they have on their health insurance policy in 2014? Or am I confusing myself more than necessary?

I am also seeing the same issue. Why would ATX remove my ability to priint the W-2 Input screen? Earlier in the year I noticed the same issue with the 1099-MIISC.

This seems to be a marketing/sales driven decision because ATX must think tax preparers are bypassing their Payroll software and using the Input screen to print forms (which is ludicrous).

I have always had access to print this screen, which came in ahndy if I misplaced a w-2 and wanted to keep something in the hard file.

I recently updated to 12.13 and my software is finally running nearly as well as the 2011 program. Everything is phenomenally faster. Opening a return is almost instant as in 2011. Saving a return no longer takes 30 seconds ( a mere 3 secs). Closing a return is almost instant. Creating e-files is 1000% faster. Using the Return Manager no longer feels like moving through mollasses, pausing after every input into the search box. The program is no longer consuming 1-1.5 GB of resources.

I have gotten all of this performance increase, yet I didn't add a single piece of new hardware. Still running my Intel Core i3-2120 3.3Hhz processor with 3GB of RAM.

I know this had been bantered around quite a bit on this forum with people claiming that other users were experiencing such poor performance because they had inadequate hardware, despite exceeding the minimum specs required by ATX.

The only two areas where I am still seeing sluggish performance is in the Bank Manager and viewing acknowledgement history from within a return, but performance is still faster than previous versions.

I guess ATX finally decided to hire experienced programmers who know how to code a Windows program. Too bad it came too late after I spend countless additional hours at the office in Feb. and March, making less money, trying to battle and dig out of this tax season.