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Affordable Care Act


Christian

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The mandate is effective Jan 1, 2014. Therefore, when the 2014 return is filed in 2015, we will be calculating the penalty.

My question is how they will account for the subsidies that are supposed to come with it. If I understand this correctly, the subsidies go to the insurance company for reducing the cost of the insurance. So the taxpayer never really gets the money, just a lower cost policy. Then, after the year is complete and the income for the year is actually reported, the subsidy has to be repaid if you did not qualify for as much as you thought when you signed up for it. Not sure how all this is going to play out, but I have a feeling the 2014 tax year is going to be a mess.

I would really like anyone who is more up on this to chime in. I have been getting this in bits and pieces and "I don't know what I don't know" about this new tax law. That is the scary part.

If I know that I don't know enough about Like Kind Exchanges, Offers in Compromise, Sub S health insurance, or anything like that, I have a good idea where to go to find out about it. I know what I do know and I have a good idea about what I don't know, but I know where to go to find out if I need to know something new for one of my clients. I am totally bewildered about ACA.

Tom

Hollister, CA

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I am with you on this, Tom. Right now I feel like I know just enough to get somebody completely screwed up. I am hoping now that we are getting so close to implementation that I will be able to find a really good class on this. Or meet the woman on the HRB ad that has read and understood the whole thing and can explain it to everyone.

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The mandate is effective Jan 1, 2014. Therefore, when the 2014 return is filed in 2015, we will be calculating the penalty.

Is the penalty imposed on an indivudual who does not have health coverage? Or just on an employer who does not offer health insurance?

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Parts of the act are already in play. Did you know that the calculations on the 2014 tax return will reference amounts paid by employee and employer in 2012? We are actively collecting that information from our clients for 2012. Easier now than 2 years from now.

The calculations will also reference amounts paid in 2013 as well. It will be a never ending stream from here on out.

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I'm as uninformed as anyone. I think the individual pays the penalty on his tax return, but we won't see drafts for some time yet. I think the employer pays a penalty if an employee buys from the state exchange; don't know if that will be an immediate invoice or on his tax return. I've been saving my handouts from seminars, but look forward to the logistics getting written down, draft forms online, and another course closer to the date it all goes live. And, I will raise my prices!

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Yes, Jack, been keeping the DD amounts from W-2s as it's the household premiums vs. household income that's one calculation. I've had employers telling me they are staying under 50 employees. CT is making noises about its exchange going live this fall. Still all very amorphous now.

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It may be that many of us will come to regard tax returns with health insurance penalties with the same disdain as EITC returns - not worth the trouble given all the headaches. At least we will have that attitude until IRS makes it a circular 230 Violation to turn clients away in either of those groups. I strongly suspect that is coming at some point as the camel's head steadily moves farther into the tent.

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Parts of the act are already in play. Did you know that the calculations on the 2014 tax return will reference amounts paid by employee and employer in 2012? We are actively collecting that information from our clients for 2012. Easier now than 2 years from now.

The calculations will also reference amounts paid in 2013 as well. It will be a never ending stream from here on out.

And herein lies the problem. Only employers with more than 250 employees need to report the DD right now. What to do with an employee who works for a company not required to report? And I know a lot of companies over 250 are not up to speed on the reporting. I work for one and we didn't get this dialed in until a couple of weeks ago (I did not start working here until late december, so I can blame my predicessor. I got it fixed eventually).

This is going to drive us nuts. I have a lot of clients that will qualify for the subsidies if they figure out how to apply for them.

I am really concerned that this is going to slam us in 2 years.

Tom

Hollister, CA

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I'm not sure that will ever be a function that accountants or tax preparers will perform profitably. I think an entire separate specialty may spring up which focuses in applying for the subsidy. It would be more insurance-oriented than tax-oriented, but would combine those specialties with and in-depth understanding of how government programs work. The closest parallel would be attorneys who specialize in pursuing Social Security Disability claims. There are already companies which perform similar services in a different context - I suspect that they are gearing up to add this service.

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The exclusion for employers is only the REQUIREMENT to report the costs on the W-2. It does not mean that the employees are not entitled to know the amount.

It is an employer dodge to avoid the work of providing the information. No matter how many employees, each taxpayer will need that specific information for 2012. Burns my backside when employers tell our clients... "We have less than 250 employees, we do not have to give you that information."

Far easier to get the information now, than in 2014.

Seems that a lot of tax preparers still need to get the training about how Obamacare is already, and will in the future, infiltrate the tax preparation and how we will be the ones implementing the program.

The insurance companies are required to report the information to the IRS efective Jan.1, 2012. IRS will use the information to match the information provided on 2014, and forward, returns. It is in the taxpayers best interest to find and record that information.

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It's my understanding that self insured folks will receive a 1099 of some sort from their carrier which will certify their coverage. Individuals covered by their employer would be exempt from any penalties as well as medicare covered individuals. I see no problem unless the person can evidence no coverage. I rather suspect the feds will want to tax all those huge employer covered benefits but that's a fight for another day.

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It's my understanding that self insured folks will receive a 1099 of some sort from their carrier which will certify their coverage. Individuals covered by their employer would be exempt from any penalties as well as medicare covered individuals. I see no problem unless the person can evidence no coverage. I rather suspect the feds will won't to tax all those huge employer covered benefits but that's a fight for another day.

And your source for this information? This is in direct opposition to the information I received in a seminar specifically about Obamacare implimentation. NO ONE IS EXEMPT (except those special groups given exemption by Congress)

More than proof of insurance is needed. The AMOUNT of premium paid by both employer and employee or self-employed person is part of the formula. Not enough, penalty. 2014 all of us preparers are going to be despised by taxpayers for giving them the news....

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A self employed person covering themselves isn't going to have a penalty if they have insurance. The penalties come in to play when the employer offers insurance, but the employee portion is too expensive for the employee to afford, per WalMart's employee plan of a few years ago. Employers with 50 or fewer employees will not be required to provide insurance.

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A self employed person covering themselves isn't going to have a penalty if they have insurance. The penalties come in to play when the employer offers insurance, but the employee portion is too expensive for the employee to afford, per WalMart's employee plan of a few years ago. Employers with 50 or fewer employees will not be required to provide insurance.

There is a formula (still being finalized) that calculates, based on family size, income and other factors, that determines if you have ENOUGH insurance. Whether you are employed or self-employed. Just having insurance is not enough to satisfy the requirement. This is the arm of Obamacare that the media refuses to report about. Check it out and see.

State exchanges are an integral part of the fiasco.

On the converse side, if you have TOO MUCH insurance coverage, there is also a penalty. (more taxes on the evil rich)

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That is to say want. :)

Christian,

Do you know you can edit your posts when you make a spelling error? You don't have to post a second time. Go to the original post and click edit and make your spelling corrections.

Unless you are trying to get to "supreme master" or "Grand Poo Bah" status on your profile.

Tom

Hollister, CA

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