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