Tax preparers face a roster of issues going into the 2014 filing season

[easytax]

Thanks,

Yes, at least this tells some detail and helps.

Here's the 1099 H - this is used for just if there were advance payments --- still a lot to figure for the other parts of the ACA.

Sorry - edit here --- forgot the 1099 and inst.

Hopefully the feds will lean toward the easy side (easy to understand too).

f1099h_12.pdf

i1099h inst.pdf

[Guest Taxed]

I am not too worried. It will sort itself out after a season or two. When 1099-HC started in MA, the chain preparers were scaring their clients with that to jack up their prices.

[SaraEA]

"It is extremely easy in MA provided the taxpayer give you a form called 1099-HC received from the insurance company."

Taxed, you've got to be kidding! It's "extremely easy" provided you enter the correct number from the HC, which is about 164 digits long. I had to check about three boxes before the software stopped charging a penalty for not having insurance for an elderly client who not only had Medicare but was dead. Then there are the quirks that arise with part-year residents (who also get a very generous credit for being renters). I definitely charge extra for MA returns, not because I want to make a "big deal" out of it but because it IS a big deal! Do you also consider California returns "a breeze"? If so, can you please move to New England and work in my office? We could really use you.

[Guest Taxed]

Sara, I am sorry to hear you had so much difficulty with that form. How many MA returns do you do? For a person on Medicare, there is a line in the HC form that you check and that should be enough to get rid of the penalty (Drake and ATX 11 works just fine).

Part year resident tax returns are time consuming because of the state allocations you have to do. Months that the tax payer was not a resident of MA is exempted.

I only have one client in CA (moved from MA).

[Catherine]

I'm in MA and I agree with SaraEA.

Those 1099-HC forms are a Royal PITA.

1. People don't know they're important and forget them/throw them out.
2. They change jobs (or their employer changes insurance vendors, or the person changes plans internally) and there are multiples -- and your client only has one.
3. Or none.
4. Or something is missing.
5. Or you get to chase down the TIN of the company because your client only has their card -- an oh by the way this is the NEW card and they changed the subscriber numbers since last year.
6. Or they don't meet the MCC "minimum creditable coverage" requirements. Then you get to go through the gazillion worksheets to determine if there is a penalty.
7. By family size.
8. By income.
9. By COUNTY.
10. By months without coverage.
11. Then perhaps request a waiver of the (truly nasty) penalty and go through a penalty waiver hearing (at least those are by phone and while I have never *lost* one the pre-hearing prep work is like an audit plus you have to fax all your documentation over days ahead of time).
12. And the other PITA problems I've forgotten.

It's only "no problem" IFF have clients with ONE insurance for the year AND they bring the 1099-HC with them.

(For you non-scientist-trained folks out there -- "IFF" is scientific notation for the phrase "if and ONLY if." Great term to know.)

[Guest Taxed]

Catherine my experience has been totally different than yours. Yes I agree when it first started people were confused and we had to constantly remind them to bring it. Now they are so well trained that if they have not received it by 1/31 they check with their employer or insurance carrier.

I have clients who have more than one company and less than 12 months coverage. You just enter the months and the software calculates the penalty. Most of my clients who get hit with a penalty choose to appel anyways. Yes they are by phone and the appeal notice tells you what they need to show.

If the Federal experience is like what we have in MA, I think we should be happy about it.

[Jack from Ohio]

Since I'm curious (nosy) I went to IRS.gov to see if there was a 1099 HC. There wasn't (figured this was an MA form any way).

Found apparently that as a small practice --- I've been blessed ---- as I reviewed the instructions on the 1099 H from the feds and also the 8885 form (feds too). I say blessed because I've never had to file either of these for providers or recipients. Many forms and procedures have "confused" me in the past BUT with patience, study, slow reading, etc. -- I could figure them out.

From what I've seen, these (1099 H and 8885) may take a lot of time (for me).

Althought that's why many of us started doing taxes --- since we're mostly independently wealthy (like the truckers)

Anyway, here's HOPING "Taxed" wishes come true and the feds give us an easy way to work with requirements of the ACA.

Happy taxing ....

>>> Since I'm curious (nosy) I went to IRS.gov to see if there was a 1099 HC. There wasn't (figured this was an MA form any way).

For your viewing pleasure:

That form is for MA. No such Federal Form is in existence yet. It would be provided by the insurance companies and would not be anything we would need to create.

IF such a form is created, and IF the insurance companies across the country LEARN HOW TO PRODUCE THEM, and IF the insurance companies learn HOW TO DO THEM CORRECTLY, and IF the rest of the taxpayers in the other 49 states LEARN TO KEEP THEM, and IF the taxpayers BRING THEM TO US, and IF the IRS gives us the CORRECT FORMS, WORKSHEETS AND INSTRUCTIONS, then it "MAY" be an easy thing.

Using the experiences of the people of MA as an example is very sketchy at best. One state, a VERY SMALL percentage of the total population of the country and it has taken them 5 years to get it "right?"

[Guest Taxed]

That form is for MA. No such Federal Form is in existence yet. It would be provided by the insurance companies and would not be anything we would need to create.

IF such a form is created, and IF the insurance companies across the country LEARN HOW TO PRODUCE THEM, and IF the insurance companies learn HOW TO DO THEM CORRECTLY, and IF the rest of the taxpayers in the other 49 states LEARN TO KEEP THEM, and IF the taxpayers BRING THEM TO US, and IF the IRS gives us the CORRECT FORMS, WORKSHEETS AND INSTRUCTIONS, then it "MAY" be an easy thing.

Using the experiences of the people of MA as an example is very sketchy at best. One state, a VERY SMALL percentage of the total population of the country and it has taken them 5 years to get it "right?"

Give your fellow Americans more credit. Just like us in MA they will learn soon to prepare that form correctly and taxpayers will soon learn to bring it to us just like other 1099 forms.

Will there be some confusion and growing pains. YES! Why scare them?

For those of you who feel it is really PIA, increase your rates. I did not charge more when we started in MA, as long as they got me the 1099-HC. Without that I do charge a few dollars extra because of the additional questions I have to answer.

[MsTabbyKats]

I'm in MA and I agree with SaraEA.

Those 1099-HC forms are a Royal PITA.

1. People don't know they're important and forget them/throw them out.
2. They change jobs (or their employer changes insurance vendors, or the person changes plans internally) and there are multiples -- and your client only has one.
3. Or none.
4. Or something is missing.
5. Or you get to chase down the TIN of the company because your client only has their card -- an oh by the way this is the NEW card and they changed the subscriber numbers since last year.
6. Or they don't meet the MCC "minimum creditable coverage" requirements. Then you get to go through the gazillion worksheets to determine if there is a penalty.
7. By family size.
8. By income.
9. By COUNTY.
10. By months without coverage.
11. Then perhaps request a waiver of the (truly nasty) penalty and go through a penalty waiver hearing (at least those are by phone and while I have never *lost* one the pre-hearing prep work is like an audit plus you have to fax all your documentation over days ahead of time).
12. And the other PITA problems I've forgotten.

It's only "no problem" IFF you have clients with ONE insurance for the year AND they bring the 1099-HC with them.

(For you non-scientist-trained folks out there -- "IFF" is scientific notation for the phrase "if and ONLY if." Great term to know.)

And...be prepared for lots of arguments with the clients.

[joanmcq]

Like a lot of things, it'll take some time to train our clients. But I'm sure when W-2s were introduced there was a learning curve. And 1098s. Even last year, the 1098s that went out without the mortgage insurance figures? We dealt with it.

I do train my clients, and train them well. If they aren't trainable, they pay for the time.

[Guest Taxed]

Once you show them how to do it,if they are reasonably intelligent they will get it. Those who don't get it, you can decide what to do with them. I am not sure why some people are fussing over the reporting requirements without even giving it a try first??

[David1980]

I expect a lot of people will confuse the 8885 as something to do with ACA.

also the 8885 form (feds too).

[easytax]

I agree --- don't have a clue on the 8885 --- (expires end of 2013) and the 1099-H, which I believe pertains to the 8885.. Never had any involvement in either.

That's what's going to make the ACA even more fun ---- as I understand it, we really won't have too much to worry with (other than sending clients to somebody to explain it to them) until we start filing the 2014 returns (2013 year).

If I'm wrong, please correct me --- as I might be even more lost on ACA than I think I am (tax preparation wise, anyway).

[Catherine]

And for divorced couples where ex-spouse continues to cover (by court order)... only the spouse in whose name the policy exists gets the letter.

[Guest Taxed]

That is correct in MA only one copy of the 1099-HC is mailed to the policyholder of record. So the ex-spouse covered under the plan with a different address does not get a copy. What I do is tell those ex-spouses that are my client to get a photocopy from their ex if they are on talking terms or call the insurance company and they will send a copy. Fortunately for most people who do not change policies we can work with the previous year's 1099-HC to get the FID and Subscriber # as long as they had full year coverage.

I hope with ACA they make the insurance company send one to each adult covered under the plan.