STUMP » Articles » A Tax Interlude (with a little Obamacare thrown in) » 18 January 2015, 10:28

Yes, I’ll be getting back to my Obamacare Tax Watch in a bit, but thought I’d just throw in some useful tax stuff in general.

I saw that wombat-socho is taking tax questions — if you have questions, GO TO HIM, not me. He’s an actual tax professional, and I’m just someone who is more into insurance and pensions.

Like wombat-socho, I will note the brou-ha-ha over a stealth change in the TurboTax bundling of features (yadda yadda). I have been using TurboTax for years, and have actually downgraded to one of their lower level products, as I had liquidated all my non-retirement investments and stopped being a full-time independent consultant (though I may go back to that again eventually).

I do have multiple sources of income, but it’s only just W-2s and 1099s. And I have to do two state returns (NY and CT). But I’ve not had a problem with it in years — I use TurboTax Deluxe, and yes, it seems that it forces you to upgrade to TurboTax Premier if you have some of the investment/business forms to fill out.

The best part for Amazon junkies? A 10% bonus on the refund if you put it on an Amazon gift card:

TurboTax with Refund Bonus Offer* Additional Details

The TurboTax Refund Bonus Program offers TurboTax customers the option to use part of their federal refund to purchase an Amazon.com Gift Card. As an exclusive bonus, TurboTax will add an extra 5% or 10% to the amount of your e-gift card, depending on the TurboTax product you’ve chosen.

If you’re using Basic (or Federal Free Edition with the TurboTax PLUS add-on), you’ll get an additional 5% bonus on the purchase amount of your e-gift card.
If you’re using Deluxe, Premier, or Home & Business, you’ll get an extra 10% bonus.

Last year, I opted to shovel $300 of my refund to a gift card, and then bought a Kindle Fire with the proceeds. (Note: I was already going to buy a Kindle Fire — I didn’t know about the bonus until I went through the final steps of the return.)

I see that there’s a Basic version, too, that’s a lot cheaper, but if you’re using Basic, there are free options for filing your taxes.

First off, as noted by wombat-socho, H&R Block has a free federal filing, and $10 per state for such a situation. I see that H&R Block also has a suite of tax software also available through Amazon. And right now, their Premium package (similar to TurboTax’s Premier) is discounted heavily.

The IRS also has free options, depending on income level. I looked at the forms available, and I see the forms are not going to be available until January 20… that’s because you can’t actually file federal taxes til then.

By the way, what does the IRS have to say about Obamacare tax filing?

Health Care Basics
The Affordable Care Act requires that a taxpayer and each member of their family either has qualifying health insurance coverage for each month of the year, qualifies for an exemption, or makes an individual shared responsibility payment when filing their federal income tax return. Some moderate-income taxpayers may also qualify for financial assistance to help cover the cost of health insurance purchased through the Health Insurance Marketplace. Taxpayers will fall into one or more of the following categories:

-Check the box. Most taxpayers will simply check a box on their tax return to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required.

Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Taxpayers can use the chart on IRS.gov/aca to find out if their insurance counts as qualifying coverage.

-Exemptions. Taxpayers may be eligible to claim an exemption from the requirement to have coverage. Eligible taxpayers need to complete the new IRS Form 8965, Health Coverage Exemptions, and attach it to their tax return. Taxpayers must apply for some exemptions through the Health Insurance Marketplace. However, most of the exemptions are easily obtained from the IRS when filing a return.

-Individual Shared Responsibility Payment. Taxpayers who do not have qualifying coverage or an exemption for each month of the year will need to make an individual shared responsibility payment with their return for choosing not to purchase coverage. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.

-Premium Tax Credit. Taxpayers who bought coverage through the Health Insurance Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. This form should be saved because it has important information needed to complete a tax return.

If the Form 1095-A is not received by early February, contact the Marketplace where coverage was purchased. Do not contact the IRS because IRS telephone assistors will not have access to this information.

Taxpayers who benefited from advance payments of the premium tax credit must file a federal income tax return. These taxpayers need to reconcile those advance payments with the amount of premium tax credit they’re entitled to based on their actual income. As a result, some people may see a smaller or larger tax refund or tax liability than they were expecting. Use IRS Form 8962, Premium Tax Credit (PTC), to calculate the premium tax credit and reconcile the credit with any advance payments.

I have already explained to friends that while the IRS was blocked from requiring people to pay the penalties in taxes owed, it can definitely be taken out of any refunds.

Oh, and they will definitely be trying to clawback overpaid subsidies. Some of those overpaid subsidies issues are going to be really ugly, and that’s part of my angry Obamacare tax stories prediction.

But I will save additional Obamacare items for a later post. There are some key aspects the IRS is definitely not highlighting, but I imagine all professional tax preparers will be.

My message: minimize tax withholding to the extent you can. That gives them less to grab at.