Affordable Care Act Affects Your Tax Return
The Affordable Care Act has impacted employees and the self-employed all over the nation since it was introduced in 2010. It’s important to understand the basics of ObamaCare to ensure that you are making the best financial decisions for yourself and your family.
Many clients ask us how the Affordable Care Act will impact their tax returns this year and in subsequent years. As the legislation continues to go into effect, the annual impact to your tax return may be slightly different from previous years.
In this post, we’ll take a closer look at common scenarios we are seeing.
How Does ObamaCare Impact Employees?
Employees who have insurance through their employers don’t typically have tax-related issues with ObamaCare. This is particularly true for employees who have employer-provided health insurance. Those who work for a salary and do not have insurance via their employer have a fairly straightforward process, too. They simply apply for coverage through the federal marketplace and disclose their income information to make sure they receive the proper coverage. At year-end, a Certified Public Accountant should review the employee’s paperwork to confirm everything is in order before filing the return.
How Does ObamaCare Affect Farmers?
For most of our clients, transitioning to ObamaCare or continuing coverage through their employer has been fairly simple. But for farmers (or anyone who is self-employed), it can be a completely different story.
Farmers find that their income is subject to weather and yield, meaning that their income is incredibly variable. In fact, it can change from one end of the scope to the other in a matter of months. Basing insurance coverage off of the previous year’s income could be a risky endeavor for many farmers. If you’re a farmer who takes the advanced premium tax credit, you’ll want to be very conscious of what your taxable income is or you could find yourself paying it all back at tax time.
Work with your CPA to closely monitor income. If an adjustment needs to be made, it is important that you develop a plan before closing out your books for the year.
The tax experts at Baker Retirement & Wealth Management, P.C. have been providing financial guidance and advice in the greater Evansville area for nearly thirty years. If you have questions about how your family or business is impacted by ObamaCare, give us a call today at 1-866-244-3517. We have helped families and business owners in Newburgh, Henderson, Owensboro, Jasper, and beyond.Talk to a CPA for Free