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    Health Insurance Entries on 1040?

    If you have full coverage for health insurance during the year, is there any entries to be made on the 1040?

    #2
    Health Care Act (ACA) forms--required even if you have health insurance?

    1. Yes.
    2. Check out the draft ACA forms which have been discussed in a previous post. Many were changed around Sept. 18.
    3. Also look at the draft instructions.
    4. The insurance carriers, or employers, as I read the draft forms, have to issue some documents to the insured individual(s), something like a 1095 (for employers)and I think 8963 for others (or something like these). I don't know what, if anything, Medicare will provide (other than the 1099-SSA), or what Medicaid will provide in the way of documentation.
    5. Taxpayers will need one or the other, or another form showing coverage or computation of the shared responsibility payment (penalty!) or and exemption to file their returns I read the current advice from IRS.
    6. Keep in mind that the ACA may really be the tax preparer increase business relief act. Extra forms, extra work, extra time (maybe 15-30 minutes) is going to require large compensation. As a frequent contributor notes, we are paid for the knowledge we have not necessarily for the time we take to do a return.
    7. Your question doesn't;'t indicate what tax year is in question, so I gather you mean for 2014 calendar year returns for individuals. State requirements may vary (such as for Massachusetts).
    Last edited by mastertaxguy; 09-30-2014, 11:15 AM. Reason: Added item 7-what tax year?/added phrase after medicaid item 4.
    Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.

    Comment


      #3
      previous post

      What post are you referring to? Date?
      "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

      Comment


        #4
        Does anyone use the Advanced Search Feature of this forum/blog?

        Originally posted by Possi View Post
        What post are you referring to? Date?
        1. Default Health care and Taxpayer Refunds was a thread early in September.
        2. There are Many other topics related, such as ACA, Obama Care, health care act, etc.
        3. I agree that the Tax Book Health care Act book may need its own blog, or at least some references to it.
        4. I also agree than my hourly rate for research of $160.00 is reasonable, minimum charge 1.5 hours.
        5. I noticed that the Forum is set up to provide, at the bottom of the post, information on what the computer thinks are related posts to each question. Of course, if you use the Advanced Search feature of this form and terms such as Obama care (Tax Materials spelling) reporting requirements, you may get different answers than using ACA reporting requirements, or Affordable Care Act reporting requirements, or Health Care Act reporting requirements. Using a thread titled "stupid or darn health car forms" is also a possibility but best not to use it.
        Last edited by mastertaxguy; 09-29-2014, 12:17 PM. Reason: Added line then amended item 5
        Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.

        Comment


          #5
          Form 1095? Available?

          Originally posted by mastertaxguy View Post
          1. Yes.
          2. Check out the draft ACA forms which have been discussed in a previous post. Many were changed around Sept. 18.
          3. Also look at the draft instructions.
          4. The insurance carriers, or employers, as I read the draft forms, have to issue some documents to the insured individual(s), something like a 1095 (for employers)and I think 8963 for others (or something like these). I don't know what, if anything, Medicare will provide (other than the 1099-SSA), or what Medicaid.
          5. Taxpayers will need one or the other, or another form showing coverage or computation of the shared responsibility payment (penalty!) or and exemption to file their returns I read the current advice from IRS.
          6. Keep in mind that the ACA may really be the tax preparer increase business relief act. Extra forms, extra work, extra time (maybe 15-30 minutes) is going to require large compensation. As a frequent contributor notes, we are paid for the knowledge we have not necessarily for the time we take to do a return.
          7. Your question doesn't;'t indicate what tax year is in question, so I gather you mean for 2014 calendar year returns for individuals. State requirements may vary (such as for Massachusetts).
          This form might still being worked on, but is it available? I take it that this is for the employer to give to the insured? Very ignorant on this subject. Any chance of them postponing this law until next year?

          Comment


            #6
            Yes

            Originally posted by zeros View Post
            If you have full coverage for health insurance during the year, is there any entries to be made on the 1040?
            The 1040 draft form has a box to check on line 61 for Full-year coverage

            Comment


              #7
              Simple "X" in the Block, all That's Required?

              Originally posted by Gene V View Post
              The 1040 draft form has a box to check on line 61 for Full-year coverage
              All that's required for someone with full coverage? Any proof required?

              Comment


                #8
                Originally posted by zeros View Post
                All that's required for someone with full coverage? Any proof required?
                That appears to be it, though I expect we'll see something that says it plainly when the 1040 instructions are released. Makes the great ACA scare/panic seem a bit overblown? As far as proof, with the 1095 forms the IRS could match up whether a 1095 was received on their end. If the IRS didn't receive a 1095 and the taxpayer checked the box that they have insurance they could potentially follow up on that. Like how an education credit might get verified when the IRS receives no 1098-T.

                Comment


                  #9
                  Full coverage "check the box" on 1040, 1040a, 1040ez

                  Originally posted by Gene V View Post
                  The 1040 draft form has a box to check on line 61 for Full-year coverage
                  1. Instructions for 2013 1040 (yes, I know that is last year), contain the following on page 5:

                  The following information does not affect your 2013 tax return. However, when you file your 2014 tax return in 2015, you and your family will have to document that you had health care coverage throughout 2014. Under certain circumstances, you may be entitled to an exemption if you did not maintain coverage in 2014. Otherwise, you may need to make a payment with the 2014 return.
                  For more information on the payment or exemptions, visit www.IRS.gov/aca.
                  If you currently have qualifying health care coverage, you will not need to do anything more than maintain that coverage throughout 2014. If you buy insurance through the Health Insurance Marketplace, you may be eligible for an advance payment of the Premium Tax Credit to help pay for your insurance coverage.
                  If you are receiving an advance payment of the Premium Tax Credit during 2014, you should report changes in your income or family size to your Marketplace. By reporting changes promptly, you can make adjustments that will help you get the correct amount. Receiving too much or too little in advance will affect your refund or balance due when you file your 2014 tax return in 2015.
                  Visit www.IRS.gov/aca for information on the tax provisions of the Affordable Care Act and www.HealthCare.gov for Marketplace information.

                  2. The phrasing "you will have to document..." seems to require some third party documentation (which may be a form 1095 from a provider) before the return is filed.
                  3. Good to know that the ACA has added 2 lines to the basic 1040 form for 2014 (at least in the most current draft version) and likely at least one additional form (maybe 2) which, presumably, is another part of the Paperwork Reduction Act of 1980.
                  Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.

                  Comment


                    #10
                    Information Needed from Client?

                    I am assuming that certain information needs to be obtained from the client when he comes in. I'm thinking that this information should be requested at the time that my mailer is mailed to them. Any idea what information is needed?

                    Comment


                      #11
                      Pre-season letters-aca

                      1. Check TTB web site as we get closer: their organizer, for example, may have a check list on this stuff. They had a nice form we have used all year to inform clients of the need to have health insurance, where to get information, and need for documentation (which we added).
                      2. Simply state something like "Let me help you keep your taxes as low as possible by bringing the documents you ahve showing your health insurance coverage, premium credit and/or premiums you have paid."
                      Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.

                      Comment


                        #12
                        If they everybody has coverage all year, it should be easy. I would think the software will have you check a box for EACH person on the tax return.


                        If one or more people on the tax return is NOT covered all year, that is where more work will be. We will need to check the months that each person did or did not have insurance (see Form 1095-B).

                        http://www.irs.gov/pub/irs-dft/f1095b--dft.pdf

                        Unfortunately, Form 1095-B is NOT required for 2014, so if the taxpayer did not receive one, we will need to take their word for it. If they were covered only part of the year and did not receive a 1095-B, it will be a pain trying to get the taxpayer to 'remember' which months they were covered. I suspect the IRS will just take everybody's word for it in 2014.


                        THEN we get to determine if they qualify for any exemptions. We will need to be familiar with what those exemptions are, and if we can do it on the tax return or if they need to submit an application through the Healthcare Marketplace.

                        https://www.healthcare.gov/exemptions/
                        http://www.irs.gov/uac/ACA-Individua...ion-Exemptions
                        http://www.irs.gov/pub/irs-dft/f8965--dft.pdf


                        For those who qualify for the Premium Tax Credit, they will receive a 1095-A, which will require a lot of data entry. Families with multiple policies will be even more work.

                        http://www.irs.gov/pub/irs-dft/f1095a--dft.pdf
                        http://www.irs.gov/pub/irs-dft/f8962--dft.pdf

                        Comment


                          #13
                          The individual shared responsibility provision went into effect for 2014. You will not have to account for coverage or exemptions or to make any payments until you file your 2014 federal income tax return in 2015. Information will be made available later about how the income tax return will take account of coverage and exemptions. Insurers will be required to provide everyone that they cover each year with information that will help them demonstrate they had coverage beginning with the 2015 tax year.

                          Comment


                            #14
                            IRS 1040 draft instructions now out (apparently since 10/8). Looks like all that is necessary is checking the box.

                            http://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf

                            Line 61
                            Health Care: Individual
                            Responsibility
                            Beginning in 2014, individuals must
                            have health care coverage, qualify for a
                            health coverage exemption, or make a
                            shared responsibility payment with their
                            tax return.
                            If you had qualifying health care cov-
                            erage (called minimum essential cover-
                            age) for every month of 2014 for your-
                            self, your spouse (if filing jointly), and
                            anyone you could or did claim as a de-
                            pendent, check the box on this line and
                            leave the entry space blank.

                            Comment


                              #15
                              Simple...

                              That's going to be one expensive box to check.
                              Thanks for the update!
                              "I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey

                              Comment

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