Sullivan & Company - Certified Public Accountants 4709 Montgomery Lane #201 - Bethesda, MD, 20814 Phone: 301-657-8080

       

 

 



 



 

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This Month's Feature Articles

 

- Last Minute Filing Tips for 2016 Tax Returns
 

- Should you File an Extension on your Tax Return?
 

- ACA Tax Facts for Individuals and Families
 

- Claiming the Small Business Health Care Tax Credit
 

- Estimated Tax Payments: Q & A

 

Tax Tips

 

- Tax Tips for the Self-Employed
 

- Medical and Dental Expenses May Impact Your Taxes
 

- Cut your Tax Bill with Home Energy Credits
 

- Tax Benefits for Parents
 

- IRAs and your 2016 Tax Return



 

 

 

 

 

 

ACA Tax Facts For Individuals And Families


 

The Affordable Care Act contains two provisions that may affect your tax return this year: the individual shared responsibility provision and the premium tax credit. Here's what you should know:

 

INFORMATION FORMS: 1095-A, 1095-B, AND 1095-C

This year marks the first time that certain taxpayers will receive new health-care related information forms that they can use to complete their tax return and then keep with their tax records.

These forms are used to report health coverage information for you, your spouse and any dependents when you file your 2016 individual income tax return this year. These forms are also filed with the IRS. Depending upon your specific circumstances, (i.e. whether you receive health insurance from the Health Insurance Marketplace, health coverage providers, or certain employers), you should have received one or more of these forms in early 2017. There are three types of information forms:

Form 1095-A, Health Insurance Marketplace Statement. The Health Insurance Marketplace sends this form to individuals who enrolled in coverage there, with information about the coverage, who was covered, and when.

Form 1095-B, Health Coverage. Health insurance providers (e.g. health insurance companies) send this form to individuals they cover, with information about who was covered and when.

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. Employers that offer health coverage referred to as "self-insured coverage" send this form to individuals they cover, with information about who was covered and when. The deadline for coverage providers to provide Forms 1095-B and employers to provide Form 1095-C was March 2, 2017 (a 30-day extension from the original January 31 filing date for 2017).

Some taxpayers may not have received a Form 1095-B or Form 1095-C by the time they are ready to file their tax return. It is not necessary to wait for Forms 1095-B or 1095-C in order to file. Taxpayers may instead rely on other information about their health coverage and employer offer to prepare their returns.

Tip: You do not need to attach these forms to your income tax return.


 

 

INDIVIDUAL SHARED RESPONSIBILITY PROVISION

The individual shared responsibility provision requires everyone on your tax return (you, your spouse, and dependents) to have qualifying health care coverage for each month of the year or have a coverage exemption. Otherwise, you may be required to make an individual shared responsibility payment.

The key elements of the individual shared responsibility provision are as follows:

If you maintain qualifying healthcare coverage for the entire year, you don't need to do anything more than report that coverage on your federal income tax return by simply checking a box. Qualifying coverage includes most employer-sponsored coverage, coverage obtained through a Health Insurance Marketplace, coverage through most government-sponsored programs, as well as certain other specified health plans.

If you go without coverage or experience a gap in coverage, you may qualify for an exemption from the requirement to have coverage (see below). If you qualify for an exemption, use Form 8965, Health Coverage Exemptions, to report a coverage exemption granted by the Marketplace or to claim a coverage exemption on your tax return.


If for any month during the year you don't have qualifying coverage and you don't qualify for an exemption, you will have to make an individual shared responsibility payment when you file your federal income tax return.

In 2016, the penalty is $695 per person for the year ($347.50 per child under 18) or approximately 2.5 percent of your yearly household income, whichever is higher, and is indexed for inflation, thereafter.


The instructions for Form 8965, Health Coverage Exemptions, provide the information needed to calculate the payment that will be reported on your federal income tax return.


 

HEALTH COVERAGE EXEMPTIONS

Individuals who go without coverage or experience a gap in coverage may qualify for an exemption from the requirement to have coverage.

You may qualify for an exemption if one of the following applies:


You do not have access to affordable coverage
 

  You have a one-time gap of less than three consecutive months without coverage
  You qualify for one of several other exemptions, including a hardship exemption
How you get an exemption depends on the type of exemption.

  You can obtain some exemptions only from the Marketplace in the area where you live, others only from the IRS when filing your income tax return, and others from either the Marketplace or the IRS.

If you qualify for an exemption, you use Form 8965 to report a coverage exemption granted by the Marketplace or to claim a coverage exemption on your tax return.

PREMIUM TAX CREDIT

The premium tax credit (PTC) is a credit that helps eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace. Claiming the premium tax credit may increase your refund or lower the amount of tax that you would otherwise owe.

If you did not get advance credit payments in 2016, you can claim the full benefit of the premium tax credit that you are allowed when you file your tax return. You must file Form 8962, Premium Tax Credit, to claim the PTC on your tax return.

NEED MORE INFORMATION?

Please call the office is you would like more information about the premium tax credit or the individual shared responsibility payment.


QUESTIONS?

If you have any questions about the ACA, don't hesitate to call the office especially if you would like more information or specific tax planning strategies this year.  Help is just a phone call away at 301-657-8080.

 

DID YOU KNOW that Sullivan & Company manages Pension Funds, Retirement Plans & Taxable Accounts through Archer Investment Corporation & Fidelity Investments for our clients.
Fidelity is the custodian for more retirement plans than any other custodian in the United States.


Let Sullivan & Company Analyze Your Asset Allocation & Risk Tolerance for FREE!
Call 301-657-8080 today!

 


 

 Wealth Management at Sullivan & Co. CPAs

Paul Sullivan leads our Wealth Management Group and is here to help you navigate your financial future. As Investment Advisor Representatives, he and our Wealth Management team are able to provide an independent opinion on the investments you already own or are considering buying.

 

We can structure a portfolio based on your risk tolerance or we can help you decide how to invest in your company 401(k) plan.

 

We work with each client to identify their concerns and to provide solutions according to their situation.

Paul is also experienced in company retirement plans. If you own a business that does not have a plan; we can discuss your options and set up a plan that fits your company.

 

If your business already has a plan; we offer a free evaluation of the plan to ensure that it is up to date and working well for you and your employees.

Our goal is to provide personal, unbiased and independent advice to help you make well-informed decisions about your financial life and investments.

Contact Chris Bailey, CPA, MBA, IAR or Ben Perron, CPA, IAR or Paul Sullivan, CPA, IAR to set up a free initial consultation (301) 657-8080.

And as always if you have any questions about accounting or investments and how they effect you or your business, please give us a call. We can help guide you in the right direction.

 


 

Remember you can call our offices if you have any questions about these or any other accounting, tax, financial planning or insurance related issues, at 301-657-8080. 

 

Regards, Paul Sullivan, CPA, IAR

President, Sullivan & Company

 

 

 

 

Sullivan & Company, CPAs | 4709 Montgomery Lane | Bethesda, MD 20814 www.eSullivan.net | email: pSullivan@eSullivan.net
Direct: 240-316-3531 | Main no.: 301-657-8080 Ext 102 | Fax: 301-657-9055