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Will ObamaCare Affect You on Your Tax Return?

By November 7, 2014IRS, Taxes

By Sunny McIntosh (newest Incite Tax employee)

This tax season will be unlike any you’ve experience so far.  Yeah for Obamacare!  (We all agree the insurance system is broken and needs fixed.  We feel there could have been better ways to improve it that make the burden more equitably split amongst all people wanting health insurance.) The 8 million taxpayers who bought insurance through Obamacare probably don’t fully understand how it affects their taxes. How could they?  The tax forms for ObamaCare finally finished rolling out October 15th, only in draft form, and not soon enough for folks to be aware of the changes and how they will be affected.

Many of these taxpayers received an Advanced Premium Tax Credit.  They may get to keep, but they also may have to pay all or some of it back.  It all depends on a handful of factors such as raises, and changes in marital or job status. This makes it difficult to do any planning before tax season comes up. This will be a hardship for individuals, CPAs, preparers and the many software companies dealing with taxes.

The final forms and instructions have not been released, and no deadline has been set for that event. This could delay people from filing as they wait for forms to complete their taxes, and essentially hold up the entire tax season. Because of this the National Conference of CPA Practitioners has recommended that the government should hold off on Obamacare for one more year. This will give tax preparers more time to look over the forms and get ready to use them in 2016.

If you  did get an Advanced Premium Credit, it never hurts to at least go through the draft forms and see if you might be negatively affected by this.  It’d at least give you 5 months to save up in case you have to pay something back.

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