Affordable Care Act and Your 2014 1040: A Quick Review

By the Patrick & Robinson CPAs Team | If you follow “Profit Statements,” you know we’ve discussed in detail how the Affordable Care Act (ACA) affects your individual income tax return this year.Of course, change isn’t easy and we continue to hear inaccuracies in the media when the new law and your taxes are being discussed. So here are the key points:

• You’re responsible for buying and maintaining qualifying health insurance for yourself and anyone you claim as a dependent.  If you held coverage for 10 or more months of 2014, simply check a box on your individual income tax return and you don’t need to do anything else when you file.

• If you don’t have qualifying health care coverage but you meet certain criteria, you might be eligible for an exemption. Most exemptions are available on your individual income tax return, but some must be claimed through the health insurance marketplace. If you or any of your dependents are exempt from the requirement to maintain insurance coverage, you must complete the new IRS Form 8965, Health Coverage Exemptions and submit it with your tax return.

• If you could have afforded coverage for yourself or any of your dependents but chose not to get it and you don’t qualify for an exemption, you must pay the penalty (called the “individual shared responsibility payment”). You calculate this tax using a worksheet included in the instructions for Form 8965 and include your payment amount on your individual income tax return.

• You MUST do something to account for your health insurance coverage status: checking the box, claiming an exemption, or paying the penalty. One bright spot: you or your tax professional can still prepare and file your individual income tax return electronically (which usually expedites your refund if you’re receiving one). 

For more details see our recent three-part blog or visit www.IRS.gov/aca.If the certified public accountant team at Patrick & Robinson CPAs can help you navigate the new ACA 1040, or assist with any other accounting services, contact our Jacksonville at (904) 396-5400 or Office@CPAsite.com.