What do I need to know about the Health Care Law for my 2013 Tax Return?
Posted by William Byrnes on March 23, 2014
The IRS stated in Health Care Tax Tip 2014-10 that for most taxpayers, the Affordable Care Act has no effect on the 2013 federal income tax return. For example, for the 2013 tax return a taxpayer does not yet report health care coverage under the individual shared responsibility provision or claim the premium tax credit. Reporting of these items start with the filing of the 2014 tax return (which will only happen between late January and April 15, 2015).
However, the IRS alerted that some taxpayers people will be affected by a few provisions, including two new medical taxes and a reduction in the ability to take a deduction for medical expenses incurred during 2013. See (1) increases in the itemized medical deduction threshold, (2) additional Medicare tax and (3) net investment income tax.
The IRS reminded taxpayers that the employer’s reporting of a taxpayer’s value of health care coverage is not taxable (the new box 12 employer health care reporting requirement, identified by Code DD on an employee’s Form W-2) .
Information available about other tax provisions in the health care law: More information is available regarding the following tax provisions: Premium Rebate for Medical Loss Ratio, Health Flexible Spending Arrangements, and Health Saving Accounts.
Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor. Financial advisors are continually looking for updated tax information that can help them provide the right answers to the right people at the right time. This brand-new resource provides fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts is famous.
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