This tax season you may think that your preparer has become an agent for Big Brother.
That’s because 2015 is the first year in which your accountant must tell the IRS that you had health insurance the prior year and that the policy met the “minimum essential coverage” standard under ObamaCare.
“In my opinion, this is another example of government regulations that will be very difficult to monitor and enforce,” says John Vento, a Staten Island CPA.
The requirements apply to the taxpayer, the taxpayer’s spouse and any dependents listed on the return.
The preparer is required to calculate the additional tax liability owing to a fine. The penalty is the greater of $95 per adult and $47.50 per child up to a maximum family penalty of $285, or 1 percent of the filer’s “household income formula,” according to the IRS.
The bigger issue, some CPAs complain, is explaining the new rules.
“I’m just afraid that many clients won’t know the answer to the question if they have creditable coverage or not for yourself, your spouse and your children,” Bernard Kiely, a CPA with his own firm in Morristown, NJ, says. “Then they’ll get frustrated with the CPA.”
Adds Vento: “This law is not clear and very difficult to interpret.”
H&R Block officials, who said the ACA will mean more business for them, predicted that many taxpayers are going to have an unpleasant surprise.
“The Affordable Care Act made health care a tax issue and is going to make filing taxes more complicated this year,” said H&R Block President and CEO Bill Cobb.
“Many may get a smaller refund because they had to pay a penalty for being uninsured. Or the refund will be smaller because they had to pay back an advanced Premium Tax Credit,” added Kathy Pickering, president of Block’s Tax Institute.
Still, CPA Kristin Esposito, tax technical manager with the American Institute of Certified Public Accountants, thinks the adjustment period for CPAs will be a one-year problem and will likely be gone by 2016.
IRS officials weren’t immediately available for comment. But the following are some of the minimum essential coverage standards the IRS lists in its publications:
Health insurance coverage by your employer
Health insurance bought through a state exchange
Coverage provided under a government-sponsored program for which you are eligible (Medicare, for example)
Health insurance bought directly from an insurance company
Other insurance coverage recognized by the US Department of Health & Human Services as minimum essential coverage.
No comments:
Post a Comment