Speaking to City of San Bernardino About Tax Implications of Affortable Care Act/Covered CAlifornia

Yesterday, I attended an event by Covered California where some top officials flew in from Sacramento to have a discussion about Covered Califo10402937_1531182990480939_6076562254069810799_nrnia and current updates, concerns, tips for the last month of open enrollment.

It really bothered me when they mention there was over 700 registered agents in the area that was notified about this event, and only about 50 actually showed up. How are you supposed to give your clients the best possible help if you do not really understand what is happening.

I learned so much in this 3 hour session it should have been mandatory for all agents, there was a lot of valuable insights, tips, and recommendation we learned.

I  spent quite a bit of time speaking with the Director of Sales for Covered California, Kirk Whelan.

The highlight, was when I was honored to be asked to give my insights on the tax implications this year with IRS and Affordable Care Act.

I have a unique insight being a licensed tax preparer and Certified Covered California Insurance Agent.

After the event, I was invited by the City of San Bernardino Employment & Training Agency, to speak and educate up to 30 of their field staff and Certified Enrollment Counselors for Covered California, to discuss what to they can expect this tax season, to discuss the 1095 forms that consumer will start getting any day, and to discuss more about tax implications, tax penalties, and subsidies.

Looking forward to speaking at this event. If you have any questions about how ACA could affect your taxes gives us a call 909-570-1103

If I got premium tax credits, do I have to file a tax return?

Yes, if you got premium tax credits for 2014, you have to file a federal tax return.  Even if you have never filed before, starting in 2014 if you got tax credits you have to file a tax return.

Your premium tax credits are based on the income you report to the IRS.  When you applied for health insurance through Covered California, you had to estimate your family income.  At tax time, you have to let the IRS know what your family’s actual income was for the year.

How do I know if I already got premium tax credits?

Lots of people may not realize they got premium tax credits.  If you applied when you enrolled, you don’t actually “get” the tax credit every month.  The IRS pays your premium tax credit directly to your health insurance plan.  Your monthly premium costs are lower as a result.

The only way to get premium tax credits is to buy from Covered California.  If you bought from Covered California, it will send you a tax form, called the Form 1095‐A, by January 31, 2015.  The Form 1095‐A will tell you if you already received premium tax

credits or not.  It will also tell you the exact amount of the tax credits you got each month.

Understanding How The Affordable Care Act Will Affect Your 2014 Tax Return

It’s hard to believe that the tax return filing season is just a couple of weeks away.  While some of our clients are unable to complete their return until later in the year, others are ready to “get it done” as soon as possible.  Regardless of which group you find yourself in, it’s very important to understand the implications of the Affordable Care Act on your tax filing process.

2014 is the first year in which the ACA truly affects the average American’s tax return.  That’s because of the necessity of proving compliance with the Individual Mandate, and because of the requirement of reconciling the Premium Tax Credit (for those with who are receiving the benefits of this program).

As one of our clients we obviously don’t expect you to understand everything about the Affordable Care Act.  That’s our job!  But we do want to get you ready for the new landscape of healthcare and taxes.  It’s important to have a general understanding of the requirements in order to be ready to have your return completed by us.  In the sections below we review areas related to the ACA that you need to be aware of before having us assist you.

Information Reporting

The Affordable Care Act introduces three new forms that many of you received in 2014, and all of you will receive in 2015.  The “1095” is distributed by the Marketplace (Exchanges), health insurance companies, and large employers.  These documents are required for the first group in 2014, and optional for the other two.  The form will look similar to this:

1095A

 

The 1095 is used to provide health insurance reporting to the federal government.  It lists each person who has received coverage. It details the months health insurance was in force, and the financial benefit of the policy (or credit).  You should expect to receive 1095s from the Marketplace in late January, and from other entities later in the tax season.  Unfortunately we expect there will be a lot of variance on when these forms arrive.

It’s very important to understand that you and your family members could receive multiple different forms.  Please keep all of these documents and bring them to our office when you meet with your tax advisor. Call us today to answer any questions, Call 909-570-1103