Accounting/Finance
Individual Medical Insurance Checkup
Mark your calendar: The 2015 open enrollment period for individual medical insurance began Nov. 15, 2014, and runs through Feb. 15, 2015. During this period, you can purchase individual medical coverage or make changes to existing coverage for 2015. No underwriting is required.
What if I miss the deadline? Typically, individual medical coverage can only be purchased during the open enrollment period. If you don’t select coverage during this period, you may not have another opportunity until the 2016 open enrollment. Are there any exceptions? Some life events may qualify you for a special enrollment period. These include, but are not limited to: getting married or divorced, having a baby, moving to a new state or being dropped from a parent's insurance plan. Learn more about getting coverage after Feb. 15.
Why is individual medical coverage important? Individual medical coverage provides essential benefits that are required by the Affordable Care Act. Most Americans are required to obtain health insurance with essential coverage or pay a tax penalty. For 2015, the penalty is 2 percent of your income or $325 per adult and $162.50 per child, whichever amount is more. Even after you pay the fee, you still won't be insured.
When will my new coverage take effect? In general, when you purchase a new policy between the 1st and 15th days of the month, your coverage will begin at the start of the following month. Enroll between the 16th and the last day of the month, and your coverage will begin a month later. For example: If you enroll Dec. 20, your policy will take effect Feb. 1.
What is a subsidy and do I qualify? A health insurance subsidy lowers the amount you spend on your monthly premium through advanced tax credits. Under the Affordable Care Act, Americans making less than 400 percent of the federal poverty level may qualify for a health insurance subsidy during open enrollment.
Do I need additional coverage? Whether you get your individual medical insurance through the Marketplace or your employer, consider supplemental health insurance. Supplemental insurance can help offset out-of-pocket expenses such as deductibles, co-pays and co-insurance. It also can help pay for non-medical expenses incurred as a result of a hospital stay, emergency room visit or outpatient surgery, including but not limited to transportation, lodging and child care.
TAX Talk
Tax filing 2015 AND Planning for new year!
Happy New Year to you all! With new year comes tax filings and planning:
Tips for Tax filing 2015
Get organized: Start collecting and organizing all of the receipts, canceled checks and other documents that support the income, deductions, and credits you’ll be reporting or claiming on your return. The better your records, the more accurate your tax returns will be. Specially, look for W-2, 1099 (INT/DIV/MISC/Brokers) etc. Many of these documents may be available electronically.
Contribute to Retirement Accounts: You may be eligible to contribute for traditional or ROTH IRAs if you are not participating in any employment sponsored retirement plans. Also, if you are self employed or own S-corporation, LLC etc. you may contribute to SEP IRA/Solo 401K before the filing dates.
Itemize Deductions: If you are eligible, you can itemize your deductions including mortgage interest, real estate taxes, sales/state taxes, charitable contributions, and other miscellaneous expenses.
Charitable Contributions (Donations) to be deductible, charitable contributions must be made to qualified organizations. Payments to individuals are never deductible. To determine if the organization that you have contributed to qualifies as a charitable organization for income tax deductions, review Exempt Organizations on the IRS.gov website.
Estimated Taxes: If you have not paid enough taxes for the tax year, you may pay estimated taxes before Jan. 15, 2015. Estimated taxes are normally paid each Quarter during April, June, September and January. Paying appropriate taxes before Jan. 15 may reduce any penalties and interests.
Residential Energy Efficient Property Credit: This tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment and wind turbines installed on or in connection with their home located in the United States and fuel cell property installed on or in connection with their main home located in the United States. The credit, which runs through 2016, is 30 percent of the cost of qualified property.
Plug-in Electric Drive Vehicle Credit: This tax credit may help taxpayers qualify plug-in electric drive vehicles purchased after Dec. 31, 2009. The minimum amount of the credit for qualified plug-in electric drive vehicles, which runs through 2014, is $2,500 and the credit tops out at $7,500, depending on the battery capacity.
Health Care Act Penalty If you were not covered for any health insurance or went without “essential health benefits” for more than three months in 2014 and didn’t qualify for an exemption, you may be required to submit to the penalty on your tax return.
Alternative Minimum Tax (AMT): Individuals with a higher income may be subject to the Alternative Minimum Tax. Under the tax law, certain tax benefits can significantly reduce a taxpayer’s regular tax amount. The AMT sets a limit on those benefits. If the tax benefits would reduce total tax below the AMT limit, the taxpayer must pay the higher Alternative Minimum Tax amount.
FBAR/Foreign Income: Ensure that you have included all the ‘foreign source income’ like – dividends, interests, rental etc. If required you may have to file forms 8938, FBAR etc.
File electronically and pay on time Filing electronically has many advantages – it is faster to file and refund, more accurate, better tracking and filing acknowledgement.
Tax Planning for the New Year
Verify W-2 tax withholdings: Many times, the tax payers either withhold too much or too little tax deductions from their payroll/W-2 income. Review withholdings to make the taxes withheld from your pay closer to the taxes you’ll owe this year. This is especially true if you normally get a large refund and you would like more money in your paycheck. If you owed tax when you filed, you may need to increase the federal income tax withheld from your wages.
Maximize Retirement plan contributions: If you have a retirement plan at work, check to see if you qualify to contribute more to the plan and to make sure you are taking advantage of an employer match. If you have no retirement plan in place, open an IRA, ROTH IRA or other such plans.
Filings Deadlines:
Business - Form 1120/1120 S – March 16, 2015 (6 months extensions available – Form 7004); Partnership/LLC – April 15, 2015 (5 month extension – Form 7004)
Individual - Form 1040 – April 15, 2015 (6 months extensions available – Form 4868)
There are various limitations, thresholds, & procedures for many of the deduction and filings. Please consult your CPA/Tax attorney/or tax consultant for proper guidance with the above subject matter.
Suresh Kumar, CPA, MBA, is the Principal of Kumar Consulting, PA, a CPA & Consulting firm licensed in the states of FL, KS, & MO and maybe reached @ 813-421-5068 or [email protected]/www.kumarconsultingcpa.com.
In accordance with IRS Circular 230, the above information is not intended or written to be used, and cannot be used as or considered a "covered opinion" or other written tax advice and should not be relied upon for the purpose of avoiding tax-related penalties under the Internal Revenue Code; promoting, marketing, or recommending to another party any transaction or tax-related matter(s) addressed herein; for IRS audit, tax dispute or other purposes.