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Thursday, January 22, 2015

Affordable Healthcare Act Checklist

Beginning this tax season, you will notice some changes on your tax return related to the Affordable Care Act, commonly referred to as ACA or Obamacare.

This is a checklist to help you gather the necessary information to prepare the required ACA related forms on your tax return. We cannot complete your return without this information.


1) I enrolled in a health plan through my employer, private insurance, VA, Medicare or Medicaid

All you will need to do is indicate that you have minimum essential coverage, a general term that includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.  For a full list of qualifying plan types, visit  or contact our office.

What we need from you:
Form 1095-B or 1095-C if you receive it from your employer or private insurer.
Dates of coverage for you, your spouse and dependents.

 2)  I purchased a health plan through a Health Insurance Marketplace

To get started, just let us know that you purchased your plan through the Marketplace.
You may have received a subsidy in the form of a tax credit to purchase health insurance through the Marketplace.  Unlike most tax credits, this credit could be applied to insurance premiums throughout 2014 when coverage began.  Whether or not you chose to receive the subsidy during the year, we are required to reconcile your credit on your tax return. 

What we need from you:
Form 1095-A (Health Insurance Marketplace Statement should be mailed to you and is also available online by logging on to your Marketplace account)

3)   I don’t have health insurance

Under the ACA, individuals who did not have health insurance for more than three months in 2014 must pay a tax penalty.  However, some taxpayers may qualify to waive the penalty this year. So, how do we determine if you qualify for an exemption?

Common exemption reasons include:
Can’t afford health insurance (the lowest-priced coverage available would cost more than 8% of household income)
Member of a health care sharing ministry

What we need from you:
Interview to determine if you qualify for exemption or are subject to shared responsibility payment.

Wednesday, January 14, 2015

Veterans and the Affordable Care Act

At Gardner and Billing CPAs, PLLC, we’ve had clients ask if they are exempt from the insurance requirements of the Affordable Care Act if they are veterans. The following is taken directly from the Veterans Administration website.


What happens if I do not have health coverage?
You do not have to pay a fee if you have coverage that meets a minimum standard (called “minimum essential coverage”). VA is required by law to notify the IRS of Veterans’ enrollment status in the VA health care system in 2014. Veterans who are not enrolled in the VA health care system and who do not have qualifying medical insurance, unless given an exemption, will be charged a fee beginning on their 2014 federal income tax return, which most people will file in the spring of 2015.

The fee is prorated based on the amount of time in the calendar year the Veteran does not have medical insurance that meets minimal essential coverage standards. VA is committed to ensuring Veterans are aware of the opportunities to meet the health care reform law’s minimum essential standards for coverage either through enrollment with VA or through the purchase of insurance offered by the Health Insurance Marketplace. The fee either will be a flat fee or a percentage of your taxable household income, depending on which amount is higher. The fee will be phased in according to the schedule below:

$95 or 1% of your taxable income in 2014
$325 or 2% of your taxable income in 2015
$695 or 2.5% of your taxable income in 2016

Exemptions from the fee will be granted under certain circumstances. For more information on these exemptions, visit

Will VA notify the IRS of health care coverage provided to each Veteran and eligible beneficiary?
Yes. Beginning in 2015, VA will send Veterans and eligible beneficiaries a letter and IRS form 1095B which will provide the details of the health care coverage provided by VA for the previous year. As required by law, VA also will notify the IRS.

If I’m enrolled in a VA health care program, do I meet the requirement for health care coverage?
Yes. If you are enrolled in any of VA’s programs below, you have coverage under the standards of the health care law:

Veteran’s health care program
Civilian Health and Medical program (CHAMPVA)
Spina bifida health care program

What are the benefits of enrollment in VA health care?
Enrollment in VA health care means you have:
·         Medical care rated among the best in the U.S.
·         Immediate benefits of health care coverage. Veterans may apply for VA health care enrollment at any time.
·         No enrollment fee, monthly premiums, or deductibles. Most Veterans have no out-of-pocket costs. Some Veterans may have to pay small copayments for health care or prescription drugs.
·         More than 1,700 places available to get your care. This means your coverage can go with you if you travel or move.
·         Met the new requirement to have health care coverage that meets the minimum standard.
In summary, if you are a veteran and are enrolled for health insurance coverage under the VA or the Health Insurance Marketplace, you meet the insurance requirements of the Affordable Care Act.  If you do not have insurance under the VA health care system and do not have qualifying medical insurance, unless given an exemption, you will be charged a fee beginning on your 2014 federal income tax return.

The bottom line is, veterans are not exempt from the Affordable Care Act insurance requirements.

Wednesday, January 7, 2015

What’s a 1099 and why do I care?

Information on the 1099-MISC
A 1099-MISC form serves a similar purpose to an independent contractor as a W-2 does for to an employee. The form reports the total amount of payments you receive from a single person or entity during the year that you provide services to. It includes some of your personal information such as name, address and either Social Security number or employer identification number. Most importantly, it will classify each type of payment in separate boxes on the form depending on the reason for your payment. Generally, if you receive payment for contract work you do, then your annual earnings will appear as nonemployee compensation.

Who is responsible for preparing a 1099-MISC?
Depending on how many different companies or people you receive payments from during the year, you may receive more than one 1099-MISC. Each payer must complete the form if during any year it pays you $600 or more. However, if you earn $500 from 20 different companies, you still must report your income even though you might not receive a single 1099-MISC.

Gardner and Billing CPAs make every effort to get the forms out to recipients by the courtesy date of January 31st, but often the information isn’t available until later.  We file 1099’s for our clients electronically (to the IRS and states) and have a filing deadline March 31st .  

What to do with a 1099-MISC
As an independent contractor or freelancer, you report all earnings on your income tax return just like an employee does, but you do it in a different way. If your freelance work is sporadic and generally not your main source of income, then you can just include the payments in “other income” on the first page of your tax return.

If you work as an independent contractor for substantial periods during the year, then the IRS will treat you as self-employed. Self-employed taxpayers must report 1099-MISC income on a Schedule C attachment to their tax return.

In addition, you are also liable for Social Security and Medicare taxes, which you calculate on Schedule SE and attach to your return.

Advantages of receiving a 1099-MISC
There are some tax advantages to earning nonemployee income on a 1099-MISC. One benefit is that you have more freedom than an employee to claim deductions that relate to your profession.

For example, if it’s necessary to use a computer to complete your work, your eligibility to claim a deduction for it is less restrictive than other taxpayers who must be eligible to itemize their deductions to do so. Furthermore, since you are not subject to withholding, you must make estimated tax payments throughout the year. But since you can calculate precisely what you owe, you can insure that you don’t pay too much in federal income tax during the year. 

Remember to get your 1099 recipient info to Gardner & Billing CPAs as soon as possible so that we may attempt to issue your 1099s by the courtesy date of January 31st!  If you are unsure who should receive a 1099, just bring us your financial record (bank statements, QuickBooks, Quicken, farm book) and we will determine the 1099s you are obligated to file.