Starting to think about your 2014 taxes? This is the first year the IRS requires you to address your health insurance on your tax return. The Affordable Care Act has changed the filing system and tax preparers are learning how it all works.
“This is going to be a complicated year for taxes, especially for people who file for themselves,” said Eve Davis, President In or Out Taxes, Inc. as she holds out a tome containing the new regulations.
“There are two major provisions taking effect this year, the premium tax credit and the individual shared responsibility provision.”
If you don’t have access to employer-provided coverage and purchase health insurance through a marketplace, there are premium tax credits and financial assistance
depending on your household size and income.
The tax credit will be paid directly to the health insurance company to help cover monthly payments. If you elect to receive a lesser credit or no credit at all, you can claim the refundable credit on your 2014 tax return (due April 15, 2015).
The fine for not acquiring health insurance varies according to income. It can be as low as $95 per adult and $45.50 for kids or one percent of taxable income. There are exemptions too, such as low-income, job loss and bankruptcy.
There are other deductions for tuition, education and mortgages that need to be considered in tax preparation also.
Oregon has one of the most stringent licensing programs in the whole country.
“Back in the 70s Oregon required all tax prepares to be a Registered Return Tax Preparer,” says Davis. “This requires us to take thirty hours of schooling a year. It also protects the residents and provides them the best tax return possible.”