Chowdahead Posted January 8, 2015 Report Share Posted January 8, 2015 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? Quote Link to comment Share on other sites More sharing options...
easytax Posted January 8, 2015 Report Share Posted January 8, 2015 You are over thinking. They either are or are not a dependent. If she gave the exemption away then there is no dependency to process --- if she took the "credit" based on the dependency, she will owe money back. If the teenager moves out and is not a dependent, ---- se where I am going. Do NOT over think, the dollars fall where they may. If they took too much credit, they are going to have to pay it back, etc. and vice versa. /s Have faith in our tax system, that they have all these covered to help us do it the easiest way possible. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted January 8, 2015 Report Share Posted January 8, 2015 Form 8962 Part 4 Shared Policy Allocation handles much of what you asked, plus a mid-year divorce but full-year health coverage on one policy, that kind of thing. Not only the coverage, but the pro rata part of the Advanced Premium Tax Credit will follow the child from the mother's plan to the father's tax return, for instance. And, your clients have been reminded on TV, radio, and in print to contact their exchange if a life-event happens, such as losing a dependent, change in income, etc. This isn't our fault. Charge what it's worth. 3 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted January 9, 2015 Report Share Posted January 9, 2015 You are over thinking. - - - Do NOT over think.... ....This isn't our fault. Charge what it's worth. These are correct answers!!! Quote Link to comment Share on other sites More sharing options...
jklcpa Posted January 9, 2015 Report Share Posted January 9, 2015 These are correct answers!!! Hardly, unless you thought all 6 of the questions in the original post were rhetorical. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted January 9, 2015 Report Share Posted January 9, 2015 I answered all to the best of my ability. Even after having most of a 2 CE update class Wednesday night cover ACA, there's a lot I don't know still. And, there's a lot of time that I will not spend researching questions that don't concern my clients; I'll answer what I can from the top of my head or my texts. The "shared" policy type questions require calculations probably not done by our software, so until I have a client who needs such, I'm not researching it now while I need to be working on payroll taxes, the prior year returns that I postponed until after 15 October, the 2014 partnership that dropped off today, my hubby's birthday this month, two church fundraisers in January, etc. If OP is still stuck after reading the instructions for Part 4, he can come back here and someone might have time to help him with the math. I need to start 3115s now also. I think they're going to be a lot more time consuming than 8962. 1 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted January 9, 2015 Report Share Posted January 9, 2015 I answered all to the best of my ability. Even after having most of a 2 CE update class Wednesday night cover ACA, there's a lot I don't know still. And, there's a lot of time that I will not spend researching questions that don't concern my clients; I'll answer what I can from the top of my head or my texts. The "shared" policy type questions require calculations probably not done by our software, so until I have a client who needs such, I'm not researching it now while I need to be working on payroll taxes, the prior year returns that I postponed until after 15 October, the 2014 partnership that dropped off today, my hubby's birthday this month, two church fundraisers in January, etc. If OP is still stuck after reading the instructions for Part 4, he can come back here and someone might have time to help him with the math. I need to start 3115s now also. I think they're going to be a lot more time consuming than 8962. Lion, did you notice that I was quoting Jack whose post included only the briefest of one-liners, and that I'd included a smiley too? The quote function on this board apparently doesn't include quotes of quotes, so I modified my post above to include everything in Jack's post that I was responding to, and you should note that it iwas not directed at you in any way, not you. *That* is what I was referring to. Your much more detailed post did a good job at answering, and maybe you didn't notice that I'd already "liked" your post previously. Sorry if you took it the wrong way. I don't think anyone on here expects another member to do research for them, at least I hope not! It's going to be a long season! Quote Link to comment Share on other sites More sharing options...
Lion EA Posted January 9, 2015 Report Share Posted January 9, 2015 I know. Last season has run into this season, and big law changes and late extenders and the first year of ACA phase-in and I'm cranky already. Hubby stocked up on chocolate to throw at me. You do so much for us, Judy, that I didn't mean to be snippy to you. I think we're asking some specific questions that no one really knows how to answer, what the IRS will think. And, when they're hypothetical and I'm busy already, I'm going to direct to the instructions or an IRS cite or quote a textbook but not go into detailed calculations that I don't have time for. Our software will handle most of the common situations. The shared policy on two separate tax returns will need some manual work that has to be done by the preparer who knows his client's numbers. He's welcome to come here to see if someone will check his math, and someone probably will. But, OP does need to read the instructions and also chastise his clients for not reporting life changes to the exchange and charge for his manual work, too. 2 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted January 9, 2015 Report Share Posted January 9, 2015 I need bigger smileys! I've been cranky too and I bought good chocolate today to take care of that. 1 Quote Link to comment Share on other sites More sharing options...
easytax Posted January 10, 2015 Report Share Posted January 10, 2015 I need bigger smileys! I've been cranky too and I bought good chocolate today to take care of that. Your smiley's are good. From your posts, no one takes offense, you do not seem like that kind of person, just one who tries to help and clarify. One thing I have found with the ACA reporting, etc. is that ---yes--- there is a lot to look at but overall if you THINK, follow the forms and have a decent understanding of the basics; things will work out. If we "over think", we just make more worry and work for ourselves. ------- Kind of like hearing someone you know went to the hospital ---- your mind comes up with all kinds (many worst scenerios) but then you find out --- yes --- they went to the hospital --- to visit the sick kids, shut-ins, etc.. All that worry for nothing --- brought on by just "over thinking" --- without the final facts. Keep enjoying and HAPPY TAX SEASON ! Quote Link to comment Share on other sites More sharing options...
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