The Cayman's Are Popular for More Than Their Beautiful Beaches
December 5, 2014
How Will Obamacare Affect Your 2014 Taxes
November 12, 2014
How Will Obamacare Affect Your 2014 Taxes?
"For the 15% of Americans who did not obtain health insurance coverage by May 1st of this year, you will be charged a penalty at tax time."
Hello, I’m CPA Seth Baker, and I have years of experience helping taxpayers stay compliant with the IRS and to pay the least amount of tax as legally possible. I earned a Finance degree from Brigham Young University and a Master’s Degree in Legal Taxation from the University of Denver. I want you to be aware of the ever-changing tax laws so you can be a proactive tax planner instead of reactive tax payer.
My topic of discussion today is the Affordable Care Act. For the 15% of Americans who did not obtain health insurance coverage by May 1st of this year, you will be charged a penalty at tax time. The fee for not purchasing the minimum required insurance in 2014 is $95 per adult and $47.50 per child (up to $285 for a family) or 1% of your taxable income, whichever is greater. If, for example, your taxable income is $100,000 you’ll owe an additional $1000 of tax this year. This penalty increases substantially in tax years 2015 and 2016.
Next, the new refundable Health Insurance Premium Tax Credit is only available through your state’s health insurance marketplace. 85% of the 8 million Americans who purchased insurance on an exchange will receive this tax credit. If at time of enrollment you calculated your adjusted gross income at $94,000, and assuming a family of 4, your premium tax credit would be $3,550. Most individuals are claiming this credit on a monthly basis through a premium reduction. There is going to be reconciliation on your return as the Marketplace estimated the amount of the premium tax credit you would be able to claim. If you gain or lose income during the year you will be responsible for the difference on your year-end tax return.
Finally, the Small Business Health Care Tax Credit has increased. The maximum credit for eligible taxpayers increases to 50% of premiums paid for small business employers. You must cover at least 50 percent of the cost of employee-only (not family or dependent) health care coverage for each of your employees. You must also have fewer than 25 full-time equivalent employees (FTEs). Those employees must have average wages of less than $50,000 (as adjusted for inflation beginning in 2014) per year. To be eligible for the credit, a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program.
Call me for more information on eligibility. My initial tax consultation is complementary. Don’t pay Uncle Sam more than what’s required!