Revenooer Rants: IRS says ‘share and share alike’
When it comes to the health care cost burden, that is.
Remember that starting in 2014, the “shared responsibility” provision of the law requires individuals to:
• Have qualifying health care coverage (aka “minimum essential coverage”), or
• Qualify for an exemption from coverage.
So, if this is not you, get ready to make your “shared responsibility” payment (SRP) when the time comes to file your federal income tax return.
For 2014, the SRP amount is the greater of:
• 1 percent of your household income in excess of the tax return filing threshold for your particular filing status, or
• The family’s flat dollar amount, which is $95 per adult and $47.50 per child under 18, limited to a family maximum of $285.
How cuddly — “shared responsibility” payment. Is that a tax? A penalty or fine of some
sort? Let’s not ask Chief Justice Roberts!
Speaking of whom, let’s all keep our fingers crossed regarding the upcoming (March 4, 2015) oral arguments before the Supremes in the case of King v. Burwell — recall that various lower courts have split regarding one’s eligibility for the “premium tax credit” (read: “government subsidy”) for health insurance purchased through the federal exchange.
That’s because the law, as written (and obviously not read my most/all of the intellectual geniuses in Congress which passed the darned thing), allows the credit explicitly only for insurance purchased through one of the state exchanges.
If the Supremes agree with IRS regulations which extend the credit to insurance bought through the Feds, life just goes on. If not, however, the economics of Obamacare will take a serious hit, and Katie bar the door!
And from our “What do I do if I can’t pay the Revenooers” department comes a few words on “offers in compromise.”
These are agreements between you and the IRS, which settle a tax debt for less than the full amount owed — a “compromise,” so to speak, between you and Obama.
Before an offer is considered by the Revenooers, the taxpayer must (1) file all tax returns, (2) make all required estimated tax payments for the current year, and (3) make all required federal tax deposits for the current quarter if a business owner with employees.
In general, IRS will not accept an offer in compromise if a bloke can pay the debt in full through an installment agreement or a lump sum. If one does qualify for an offer, send the government $186 as your “application fee” with the offer. And check out IRS Form 656 Booklet for more details.
— CONSULT YOUR TAX ADVISER – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation. Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He can be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.
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