It is the day before the deadline to file your taxes and you have gathered all your information about your income and your proof of living expenses and you have almost finished filling out your tax forms. You wish that you had not procrastinated until the last minute. The pressure is on, but you feel confident that you are doing everything right. You just happen to have the radio on in the background and something said suddenly catches your attention: “The IRS is responsible for monitoring whether people comply with the new health care laws. They’ll do this by requiring you to report the value of your health plan on your tax return. If you don’t have coverage, a penalty will be assessed.”
Because you thought you were almost done with preparing your tax forms, this announcement on the radio causes you to think of new questions about how you are to fill out the forms. You pick up the tax instruction booklet put out by the IRS for the 1040 under the heading “When You Must Use Form 1040?” and you read on page 13 item 7, “You are eligible for the health coverage tax credit. See Form 8885 for details.” So you don’t have that form, so you go to the internet and do an online search and find Health Coverage Tax Credit and there from the instructions for the Form 8885 you discover that there is an additional form you have to have and fill out. Fortunately you have a printer and the IRS provides the form online. So now you realize that you have to figure out how much you have spent each month on health care insurance premiums for the form says: “Enter the total amount paid directly to your health plan for qualified health insurance coverage for the months checked on line 1.”
Now you really wish that you had not procrastinated.
“Starting in 2014, the Individual Shared Responsibility provision calls for each individual to either have minimum essential coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.” This is found under the heading of “Health Insurance Premium Tax Credit” at IRS.gov.
Did you know that “the estimated tax for the average employee in a fully-insured, employer-sponsored plan in 2014 ranges from $77 for single coverage to $266 for family coverage, increasing by 2018 to almost $200 for single coverage and almost $500 for family coverage. The estimated tax on exchange coverage is a bit lower ($66 in 2014), but this calculation depends on assumptions about average premiums that are somewhat speculative, since people are still signing up, and detailed enrollment data even for those who’ve already signed up has still not been released,” stated an article
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