Tax Tips from The Bookkeepers
- Affordable Care Act
- Health Insurance for Self Employed
- New Hiring Incentives
- Advanced Earned Income Eliminated
- Making Work Pay Credit
- 10% Tax Bracket
- Energy Saving Home Improvement Credits
- Mileage Rates
- Maximum Social Security tax
- Retirement Contributions Limits for 2010 & 2011
- Annual Gift Tax Exemption for 2010 & 2011
- Increased Start-up Expense Deduction Available
- Section 179 Expense
- Bonus Depreciation
- IRS Refunds
- High Income Phase-Out
- AMT Tax Relief
- 1099 Reporting Requirements
The Affordable Care Act is hundreds of pages long, and impacts virtually every taxpayer and many employers. Beginning October 1, 2013, uninsured Americans were eligible to start shopping for affordable health insurance in the online health insurance marketplace. Most uninsured U.S. citizens and legal residents will be required to purchase health insurance by March 31, 2014.
Health care reform provides expanded coverage: Ability for young adults to stay on parents' plan until age 26. Individuals with pre-existing conditions cannot be denied coverage. Medicaid will now be offered to individuals under age 65 with income less than $15,302 or $31,155 for a family of four.
Uninsured individuals who purchase health insurance through an online health insurance marketplace or exchange and have income no greater than about $94,200 for a family of four, may be eligible for a government subsidy to help pay for health insurance. The subsidy will be in the form of a tax credit. Unlike most tax credits, you will not have to wait to receive the credit; it will be applied to your insurance premium.
If you are required to purchase health insurance and have not done so by March 31, 2014, you will receive a tax penalty and will be on your 2014 tax return filed in 2015. The penalty in 2014 is $95 per adult, $47.50 per child, capped at $285 or 1 percent of household income, whichever is greater. By 2016, it rises to %695 per adult, $347.50 per child, capped at $2085 or 2.5 percent of household income. There is no penalty for a gap in coverage less than three months.
You may not be required to purchase insurance and will not see any changes in your 2014 tax return with regard to the purchase of insurance if you already have health insurance, or you have income below $9750 if you are single, or you have financial hardship, or the lowest cost plan option exceeds 8% of your income or you are American Indian.
Beginning January 1, 2013, employers must withhold and report an additional 0.9 percent on employee wages or compensation that exceeds $200,000.