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11 key tax changes for 2014
Source:
finance.yahoo.com
- Feb 1, 2014
By Bill Bischoff
January 22, 2014 8:59 AM
The last few years have featured so many tax changes that it is hard to keep them straight. For some help, here’s a quick summary of what I think are the most important federal tax changes that will affect individual taxpayers this year.
Penalty for failure to comply with individual health insurance mandate:
Starting this year, the Obamacare law says individuals who fail to carry “adequate” health insurance will face a penalty. More specifically, nonexempt U.S. citizens and legal residents will owe the penalty if they don't have so-called minimum essential coverage. There are a number of exceptions to the penalty, such as the one for eligible lower-income individuals and the one for certain folks whose existing health insurance plans were canceled. I’ll provide all the gory details about this new penalty in next week’s column.
New tax credit for buying health insurance:
For 2014, a so-called premium assistance credit is available to eligible taxpayers who obtain qualifying health insurance by enrolling through a state exchange or an exchange operated in partnership between a state and the federal government. This is the health insurance subsidy that you’ve probably heard or read a lot about. You are potentially eligible if your household income is between 100% and 400% of the federal poverty line and you don’t have access to employer-sponsored affordable coverage. The allowable credit can vary widely depending on your specific circumstances.
The credit can be paid by the government directly to your insurance company to lower your monthly premiums or it can be claimed when you file your federal income tax return. You may not know the exact amount of your allowable credit until you file your return. Any differences between what you receive in the form of reduced insurance premiums and the credit you’re actually entitled to for the year will be reconciled when you file your 2014 return sometime next year. In other words, if you collect more than you’re entitled to, you’ll have to pay back the excess with your return.
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Category: General Business
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