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Archive for the ‘ObamaCare’ Category

No ObamaCare Penalty On 2016 1040s

Posted by taxguru on February 16, 2017

Trump has done what the Supreme Court refused to do and wiped out the penalty for not having health insurance.  It appears to be effective for the 2016 1040s that we are currently in the process of preparing.

Major Blow to Obamacare Mandate: IRS Won’t Reject Tax Returns That Don’t Answer Health Insurance Question


Unfortunately, this isn’t retroactive to previous years, so no refunds will be allowed for the penalties already paid in.  But, those amounts were much smaller than the penalty is scheduled to be for 2016 and future years. However, people who have not yet filed earlier year (2015 and back) returns can most likely now skip that penalty when they get around to filing them.

Update: IRS statement on this issue.

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Let the finger-pointing begin…

Posted by taxguru on February 11, 2016

IRS chief: Blame rotten customer service and data hacks on Obamacare

Posted in IRS, ObamaCare | Comments Off on Let the finger-pointing begin…

Last Minute Tax Season Warnings

Posted by taxguru on April 5, 2015

IRS deadline extended for ObamaCare customers sent the wrong tax form – As I explained earlier, IRS is encouraging people who may have incorrect ObamaCare info to file for an extension (Form 4868) until October 15.  Hopefully, the correct data will be available by then.

Scammers Are Working OverTIme:

If A Caller Says, ‘I Am With The IRS,’ He’s Not – From NPR

Don’t be Fooled, Phone Scams Continue to Be Serious Threat Nationwide – From IRS.


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Does ObamaCare forbid extensions?

Posted by taxguru on March 31, 2015

With all of the discussion over the past few years about what a steaming pile of crap the 2,200 page ObamaCare legislation is, I had never heard of it denying anyone the ability to file for an extension of time to file their income tax returns…until a few days ago.

As has been the case for the past few decades, we only fully complete about five to ten percent of our individual income tax returns by April 15, with most clients opting for the more relaxed pace of filing for a six month extension of time.  Those clients who do insist on having their returns finished by April 15 have been given a deadline of March 1 to submit all of their forms and data.  It thus surprised me to read the following note that a married couple client on the Left Coast sent in with their tax return package almost four weeks after the March 1 cut-off.

I received an email from our Covered California representative reminding us that our tax returns
must be filed by 4/15/15.
I hope this won’t be too big a problem.
Very sorry for the short notice.

While I don’t like the added pressure during Tax Season, I normally try to accommodate client rush jobs, when the reason is legitimate, such as for a loan application or a child’s college financial aid. However. this didn’t feel right; so I sent the clients an email about it.

Your stuff looks complete. The only concern I have is with the new ObamaCare Form 1095-A.  As I covered in my blog a short while ago, it was announced that the Calif healthcare exchange sent out incorrect 1095s to something like 800,000 people.  Have you verified that the ones you sent me are accurate?  Neither one has the “Corrected” box checked.

Which brings me to the due date of your tax return.  Today, as well as the past few days, when clients have told us that they are just now sending in their 2014 info and are assuming that we can get their returns done by April 15, we laugh ourselves silly.

There is something very fishy about what you were told, or you may have misunderstood them.  I have not heard of anyone else anywhere in the country being ordered to file their tax returns by April 15 and not being allowed to file for extensions.  You are the very first person to mention such a demand, and I read a lot of other tax discussion boards.  This should have come up somewhere if it were a legitimate requirement.  That just doesn’t seem fair or legal for them to require that, because there are literally hundreds of reasons people may need more time to assemble all of their tax return data.  In fact, after my recent heart problems, we signed up for ObamaCare and they haven’t mentioned any need to file our 1040 by April 15; which is good because we are going on extension.

However, if you can verify that the 1095s you sent are accurate, we will try our best to get your returns done by April 15.  I don’t want to have to prepare an amended return if it is later discovered that the 1095s are incorrect, because IRS often audits amended returns, and I’m sure you don’t want to have to go through another IRS audit.

I hope this isn’t too confusing for you and I’m not trying to be a troublemaker.  I’m just trying to look out for your best interest and it always bugs me when people are given incorrect tax advice.

Let me know if you have any questions and have verified the accuracy of the 1095 forms.

Thanks for your help with this.

Sherry added this comment to the client:

Please forward Kerry that E mail you got from Obamacare.  He thinks you must be misreading it. This is the first we’re hearing about this! It could be a scam because they were telling people to hold off on doing tax returns by April 15th themselves.

The wife replied with the following

Thanks for the info Kerry.  The 1095-As that he sent are the only one we received.  The numbers match the totals of the checks I wrote so I think the 1095-As are both correct.
Please go ahead and file the extension.

and she also forwarded the email she had been referring to, which included the following regarding the issue of extensions

Can I File an Extension if I Received Subsidies?

Posted: 23 Mar 2015 03:33 PM PDT

Question: If you have already been getting the credit, is the 4/15 2014 tax filing deadline firm that covered ca makes you agree to, or is an extension allowed until 10/15/15? what is the final consensus? thanks
Answer: You will meet that requirement when you file a tax return on 4/15/15 along with your application for an extension. In other words, even though you are filing for an extension, you still have to file a return on April 15th.

My response:

Thanks for sending me a copy of the Covered Calif Q&A.  I now understand the source of your confusion about needing to file the actual tax return by April 15.

The response to the question about extensions makes absolutely no sense and must have been written by a bureaucrat who had been  partaking of a little bit too much medical marijuana.  Nobody files both an extension and a tax return on April 15.  It’s one or the other.

We will send you a copy of the April 15 extension and will prepare the actual returns as soon as we can after the April 15 crunch.

Thanks for your help with this.

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Posted in extensions, ObamaCare | Comments Off on Does ObamaCare forbid extensions?

Sickening Tax Season

Posted by taxguru on March 11, 2015

Luckily, we haven’t yet had any tax returns that involved the new ObamaCare 1095 tax forms.  I had taken some webinars over the past several months on how to deal with them; but those all assumed that the 1095s that clients would be receiving would be accurate.  They didn’t take into account the learning curve (aka incompetence) of this new government involvement in our health care, as described by Michelle Malkin in this article.

 Obamacare’s 1095-A Nightmare


Posted in ObamaCare | Comments Off on Sickening Tax Season

It’s Alive!

Posted by taxguru on February 23, 2015

A perfect name for it.

ObamaCare’s Frankenstein Tax Monster Awakens

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GIGO – ObamaCare Style

Posted by taxguru on February 20, 2015

Dealing with all of the new forms and other info we need to report on tax returns is confusing enough with accurate data. It makes things worse when the source documents are screwed up, as seems to be the case for hundreds of thousands of  people we know about.

Covered California Sends Out Nearly 100,000 Tax Forms Containing Errors, Others Deal With Missing Forms

Obama administration sent 800,000 customers incorrect tax forms 

Posted in ObamaCare | Comments Off on GIGO – ObamaCare Style

Paying Voluntary ObamaCare Penalty?

Posted by taxguru on January 31, 2015

White House Seeks to Limit Health Law’s Tax Troubles

Millions to owe Obamacare tax penalty

Considering how easily anyone can claim an exemption from the penalty for not having proper health insurance coverage, it will be interesting to see how many people volunteer to actually pay it. I certainly don’t expect any of our clients to do so.

QuickBooks Pro 2015 Software - Enjoy $50 off! Save Time & Get Organized!

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ObamaCare Info CheckList

Posted by taxguru on November 10, 2014

Similar to the info and documentation we have to get from clients claiming the EITC, NATP has produced this three and a half page checklist for info we need to get for the ObamaCare credit and penalty.


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More Tax Season complications ahead…

Posted by taxguru on October 8, 2014

As has been the case for decades, our rulers in DC can’t resist the temptation to make everything more complicated.  Tax pros who worry about losing clients to do it your-selfers, it’s just the opposite. 


IRS warns of delays if U.S. Congress fumbles tax ‘extenders’


Health law waivers: Too complicated to claim?


From Greatland:

Businesses Face Learning Curve on new IRS Rules for Affordable Care Act Reporting for 2015


Greatland offers information, guidance on 1094 and 1095 forms


Grand Rapids, Mich., Oct. 7, 2014 – While businesses are preparing to issue W-2s and 1099s for the past year, they’ll also need to start learning about IRS forms 1094 and 1095 in preparation for the 2015 tax year and beyond.


Greatland, one of the country’s leading providers of W-2 and 1099 products for business, is offering information about the forms, reporting requirements and suggestions on how to avoid penalties once filing is required next year.


According to the Internal Revenue Service (IRS), the Affordable Care Act requires employers to file annual information returns with the IRS and furnish statements to employees on health plan coverage information beginning in 2016 (for reporting on calendar year 2015).


Information is reported by insurers and self-insured employers to individuals using Form 1095-B or, if the employer is also subject to the employer shared responsibility provisions due to its status as an applicable large employer, Form 1095-C. The employer must also provide all Forms 1095-B or 1095-C, as applicable, to the IRS in packages using the appropriate transmittal form.


“We expect to see an increase in enforcement next year and failure to comply may result in reporting penalties,” said Bob Nault, Greatland’s CEO. “These forms will essentially serve as a proof of coverage for employees, so it’s imperative for businesses to be familiar with this change and ready for next year.”


Below is a summary of each new form related to the Affordable Care Act:


  • Form 1095-B—Health Coverage

Insurers and self-insured employers that provide health plans are required to report on the individuals who are covered by their health plans. These providers will furnish each primary insured with Form 1095-B that will indicate the months during the calendar year that the insured and his or her family members had coverage under the plan.


  • Form 1094-B—Transmittal of Health Coverage Information Returns

Form 1094-B is the transmittal form for Form 1095-B.


  • Form 1095-C—Employer-Provided Health Insurance Offer and Coverage

Employers with 50 or more full-time employees (including full-time equivalent employees) are required to report whether or not they offered health coverage to their employees by providing each full-time employee with Form 1095-C. This form asks for information such as whether the employee was offered coverage and for which months and the employee’s share of the lowest cost monthly premium for self-only minimum value coverage. A large employer with a self-insured plan will only be required to submit Form 1095-C, as the information in Form 1095-B can be included in Form 1095-C.


  • Form 1094-C—Transmittal of Employer-Provided Health Insurance offer and Coverage Information Returns

Form 1094-C is the transmittal form for Form 1095-C.


To avoid penalties, businesses must be aware of timing for this new requirement. Form 1095-B or Form 1095-C, as applicable, must be provided to employees by January 31, similar to W-2s. This means that statements for 2015 must be provided no later than February 1, 2016 (because January 31, 2016 is a Sunday).



Posted in ObamaCare | Comments Off on More Tax Season complications ahead…