ACA/Obamacare Subsidy Debit or Credit and Penalty/Tax: Time to Pony-Up

“Understand the new health-care provisions. Under the Affordable Care Act, filers this year must check a box on Line 61 on the 1040 form if they had approved health-care coverage for all of 2014, or possibly pay a penalty if they didn’t. The instructions for Form 8965 explain how to calculate the penalty.

Employers aren’t required to provide evidence of ACA-approved insurance to employees until the 2015 tax year.

Last year, several million people received an upfront tax credit to help them buy insurance, and they could owe more tax now if their income was larger than expected or less if it was smaller than expected. According to estimates by the Kaiser Family Foundation, about half of tax-credit recipients will need to make a repayment that averages $794 for 2014, while about 45% will get back an average of $773. The average refund for all taxpayers is currently $2,893.

In February, the Department of Health and Human Services said it sent erroneous forms to about 800,000 tax-credit recipients living in 37 states. People who already had filed returns using the erroneous information were given a free pass by the IRS, but the rest have been told to wait for corrected forms before filing.

Millions of people also qualify for exemptions from required ACA coverage. They need to attach a Form 8965 to this year’s return.” - Last-Minute Tax Moves, wsj.com, 03/27/2015.

Link to the article appears below:

http://www.wsj.com/articles/last-minute-tax-moves-1427460256?KEYWORDS=weekend+investor