ACA and your Taxes
Weather you call it Obamacare or the Affordable Care Act (ACA), the new health care laws could have a large impact on your upcoming taxes. Tax preparers and bookkeepers across the country are preparing for an influx of questions on topics from the premium tax credit to the personal responsibility tax. Today I would like to cover a couple of the more common questions that we are seeing as this new era kicks off. What is the premium tax credit? In layman’s terms, this is how the ACA law plans on making insurance affordable for those who are uninsured. This credit is calculated using your federal adjusted gross (AGI) income (with some adjustments), and then is compared to the national poverty level. If your AGI is within certain limits (up to 400% of the poverty level) you may qualify for a credit towards your health care premiums. This credit can be applied in one of two ways, either monthly paid directly to the insurance company leaving you to pay the remaining balance, or you pay the entire balance of the premium all year and receive a refundable tax credit on your 2014 tax return. What is the personal responsibility tax? […]
