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Latest From The Pronto Tax Blog

By Scott J. Davidson

 

Well here we are in the thick of tax season! I hope you're as busy as can be! 

Today we want to talk about Patient Protection and Affordable Care Act aka ObamaCare the long awaited bugbear of the year. It may seem big and scary but, for this year, it's not too bad. Penalties are $95 per adult, 47.50 per child up to $285 for the household. For households making more than $28,500 it's 1% of income. The IRS also directs preparers to take client's word on coverage for the year in good faith. So as it stands the provisions are not too threatening.

Next year is a different matter as penalties rise drastically! The minimums more than triple to $325 per adult and &162.50 for children up to $975. For higher earner ($48,750+) the penalty changes to 2% of income. The IRS will also start checking compliance more aggressively as taxpayers will start receiving the 1095-B and 1095-C for tax year 2015.

What does this mean for this year? It may be easy for many clients to eat the cost or just say they were covered. However it is time to start preparing your clients for next year and beyond. Letting them know how important compliance is for their tax bill turns what could otherwise be a horrifying surprise into something manageable. It is something to think about when interacting with clients.

Have a wonderful tax season!

 

 

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