Starting on October 1st, provisions of the Patient Protection and Affordable Care Act, or Obamacare, will go into action. While the government may effectively “shut down” due to Congress’ failure to compromise over the issue, the IRS has nonetheless provided us with some useful information regarding ways in which these new provisions will affect our taxes. Here are some factors to consider going forward through the rest of 2013, and looking ahead to 2014:
The Affordable Care Act, or health care law, contains new health insurance coverage and financial assistance options for individuals and families. While the IRS will administer the tax provisions included in the law, You should visit HealthCare.gov for more information on coverage options and financial assistance.
Open Enrollment for the Health Insurance Marketplace: The open enrollment period to purchase health care coverage through the new Health Insurance Marketplace begins Oct. 1, 2013. When you get health insurance through the marketplace, you may be able to get the new advance Premium Tax Credit that will immediately help lower your monthly premium.
Filing Requirement: If you do not have a tax-filing requirement, you do not need to file a 2013 federal tax return to establish future eligibility or qualify for future financial assistance, including the advance Premium Tax Credit to purchase health care coverage through a Health Insurance Marketplace.
W-2 Reporting of Employer Coverage: Certain employers are required to report the value of the health insurance coverage they provide. The value of health care coverage as reported by your employer in box 12 and identified by Code DD on your Form W-2 is not taxable.
Itemized Medical Expenses: You can deduct your unreimbursed medical and dental expenses that exceed 10 percent of your adjusted gross income on your 2013 tax return. The 7.5 percent threshold will remain for those 65 and older for tax years 2013 through 2016.
Looking ahead to 2014
Premium Tax Credits: If you get your health coverage through the marketplace, you may be eligible for a Premium Tax Credit. You can elect to have the advance credit sent directly to your insurer during 2014, or wait to claim the credit when you file your tax return in 2015. If you choose to have advance payments sent to your insurer, you will have to reconcile the payments on your tax return. Learn More.
Individual Shared Responsibility Payment: Starting January 2014, you and your family must either have health care coverage, an exemption from coverage, or make a payment when you file your 2014 tax return in 2015. Learn More.
Change in Circumstances: If you are receiving advance Premium Tax Credits to help pay for your insurance coverage, you should report changes such as income or family size to your marketplace. Reporting changes will help to make sure you are getting the proper amount of assistance.
- Everything you need to know about life under Obamacare (washingtonpost.com)
- Q&A: Tuesday a big day in health care law rollout (kansascity.com)
- Decoding the ACA: Small businesses face insurance option, shopping challenges (cumberlink.com)
JDKatz, P.C. is a full-service law firm focused on tax law, business and transactional law, estate planning and elder law. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys, or visit http://www.jdkatz.com.