With tax time coming up and taxes owed coming up in just a few months, being a small business owner makes it a little more nerve racking than it used to be as just individual tax filers. We have to make sure we know what we can deduct, manage and input our revenues, and of course everything related to our family, us and our 3 kids. We have payments for loans that we can deduct, expenses for business, and the newest is with the new health care law.
For most Americans, Tax Season is not that the biggest burden, many have their own means to do their taxes, many have very minimal documents to enter, and many who have been with their jobs for a long time, their tax year is almost the same every year, minus many items related to their investment accounts. With the new Affordable Healthcare Act being in law, most people will be minimally affected.
I have relied on Turbo Tax for as many years as we have been together with kids. When we were younger and working a simple job with a paycheck every 2 years, re relied on the ease and simplicity and accuracy of TurboTax to make sure we did as according to law. Even when I was a teenager working, I used TurboTax for the ease of filing and of course the lightening fast refund I used to receive, this was before tax e-file was common, and most people waited on the mail for their refund if owed.
TurboTax Health has a lot of information and helpful advice to find out more about this new law and to better understand health care and our taxes. We are a small business and signed up for the ACA and are interested in what this mean during tax time. And like with any tax credits or deductions it is important to protect ourselves by making sure we know how to implement the new law and filing it accordingly, it pays off to be correct and spot-on with taxes! Just because a new Tax law has come into place does not mean you will need to hire some new consultant or accountant. TurboTax has filing for the new law all taken care of. It will be as simple as just checking a box for most Americans. Right now Open Enrollment for the health care exchanges started November 15 and will end on February 15, 2015.
It’s important to understand and not be uninformed during the Tax Season. Being on top of knowing your allowable deductions and having an understanding of how easy TurboTax can help and make it simple to include the Affordable Care Act (ACA) or Obamacare. TurboTax makes it easy for people like us by simplifying the federal tax code. Being established for past 30 years they have already made sure the ACA filing will be just as easy as before. When using software like TurboTax, you do not have to worry about dealing with the actual ACA forms, just enter the information as requested by TurboTax and it will enter it correctly and accurately by asking the right questions.
Some important things to know about the rules of the ACA:
- 2015 will be the first year to file because the law states that all Americans are required to maintain health insurance for 2014
- Filing with TurboTax will be as easy as clicking a box on their tax return to confirm compliance of insurance. This will apply to about 9 out of 10 taxpayers.
- With more than 2/3s of American workers relying on their paycheck earnings, they will not need to pay anything to comply, except having insurance. For these earners their 2013 tax year refund was on average of $2,800 (Source: IRS.) coming to be one of the biggest checks to be received at one time.
With the ACA coming into effect, Taxpayers will fall into three categories.
- Insured through an employer – 9 out of 10 taxpayers will easily comply with the ACA on taxes because they should have insurance through their employer, Medicaid, Medicare, or a private provider (Congressional Budget Office). It will be as easy as checking a box on TurboTax.
- Insured through health care exchanges – Millions of people have used the healthcare.gov website of their state exchange to find a private health plan (Congressional Budget Office). People like ourselves will receive a 1095-A form from our state exchange and need to enter information from Form 1095-A on my taxes, like with our other contractor forms and others with their W-2 forms.
- Uninsured – This is what the ACA is trying to alleviate. With about 42 million people uninsured in America (Congressional Budget Office) Americans that to not have insurance and not receive any assistance on the exchange will be assessed a $95 penalty or roughly 1% of their income.
However, those who are currently uninsured can take advantage of buying their own Health insurance plan and coverage right now during open enrollment. Check out TurboTax’s free calculator to find out what your penalty may be for 2014. The penalty calculated by family size and income. There is an exemption for about half of all the 42 million uninsured. 23 million Americans may qualify for an exemption but most do not know this and most likely will pay some kind of unnecessary penalties (Congressional Budget Office). Some of the reasons for the exemption include:
- “Only 5% of people that qualify for an exemption have applied (TurboTax).”
- Numerous reasons can qualify someone for exemption of being penalized for not having health insurance; this includes not making enough money. Check out TurboTax Healthoffers to see if you or help someone find out if the qualify for an exemption.
The goal of the ACA is to help Americans get insured. There are ways for those who do get healthcare coverage through their employer or can’t afford to pay-out-of-pocket to get insurance. Enroll for insurance through a healthcare exchange or Marketplace and there may also be programs available for government assistance though premium tax credits and subsidies. Again eligibility is generally based on a home’s entire income and its family size. People can find out more about the subsidy or to see if they qualify by checking out TurboTax’s health care calculator at TurboTax Health.
Are you ready for tax season?
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.