Headaches for some taxpayers under the Affordable Care Act
The
All taxpayers must check a box on their returns to affirm they had health insurance -- or face a financial penalty -- as the so-called individual mandate goes into effect this year. Those who didn't have health insurance for most of 2014 must pay either
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And some taxpayers are finding they received too much in subsidies when they bought health insurance through the exchanges for 2014, triggering a tax penalty.
"For most people, really the majority of people, there isn't much more involved than just checking a box on the return saying, 'Yes, I had insurance all year,'" said
Tax returns are due by Wednesday, when they must be electronically filed or postmarked. For those waiting until the last minute, the
Every tax season comes with tweaks to the tax code that can add to the workload.
This year also has been marked by fraud. In February, the company behind TurboTax temporarily suspended processing state tax returns after some customers logged on and found that their tax return had already been claimed.
But the biggest difference in the tax season this year is the Affordable Care Act.
IRS Commissioner
"The filing season has gone swimmingly," he said. "The ability to implement all of the new statutory requirements and changes and have the season run smoothly has surprised almost everybody. We are delighted with it."
Some taxpayers and accountants disagree.
They have reported difficulty calculating in advance the penalty for not having health insurance and determining the accurate amount of credits someone should receive when buying on an exchange.
Perlman said there was a "misconception" when the law passed that the penalty for not having insurance under the individual mandate would only be
According to a survey earlier this tax season by
For those who received subsidies when enrolling in health insurance through exchanges, roughly half will now have to pay money back, according to the
"The additional tax burden imposed under the Affordable Care Act continues to be one that requires attention and planning to minimize its impact," Horning said.
"The people who it's causing issues for in 2014 are people who for one reason or another bought insurance on the exchange and may have received advanced credits that had some reporting issues, and likely have caused some difficulties in properly accounting for the credits."
The Jigoulovs said they weren't totally surprised when they filed their 2014 taxes and discovered, based on their income, they had received too much in subsidies.
They suspected they were getting too much when they first enrolled for insurance through the state's exchange, an online store where those without insurance can buy health plans. Although they thought they were enrolling in one family plan, they actually had enrolled in two separate plans.
They tried to correct the issue but said they were stymied by the website, which was plagued with technical problems at the time. Jigoulov said a call center worker told him he would not be he held liable and that what ultimately mattered was that he had insurance. He said it is unfair that he now has to pay.
"I am sure I am not the only one in this situation," he said. "Because problems with the website were widely reported."
A spokesman with the Health Benefit Exchange, which manages the website, said it doesn't discuss individual cases. In general, people are only entitled to the subsidies based on their income, said spokesman
"Whatever mistake is made, you owe the tax that is owed," he said.
Jigoulov filed a complaint with the attorney general's office. The office investigated the complaint but did not have jurisdiction over the matter, said spokesman
Meanwhile, taxpayers are having difficulty getting timely answers from the
"Taxpayer service has been cut back," Luscombe said. "People aren't getting their phone calls answered as frequently as they have in the past. People have been encouraged to act sooner than they have in the past because if they have a question, they likely won't get it answered quickly."
Perlman advised those without health insurance this year to sign up as soon as they can, or face an increased penalty next year. While there are some exemptions available for people in various circumstances, the penalty is set to rise to 2 percent of income in 2015 and 2.5 percent of income in 2016.
"It's not too late to sign up for insurance through the marketplace and eliminate or cut down on any 2015 penalty," she said. "It will definitely be more expensive to not have insurance in 2015 and even more so in 2016."
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