The New Year is a time for change. And with the Affordable Care Act (ACA) firmly in place, 2014 is bringing about more change than usual — especially when it comes to how much money stays in your wallet during tax season.

The ACA, also known as Obamacare or the health care law, includes new health insurance coverage and financial assistance options (the Premium Tax Credit) for individuals and families purchasing insurance through the Health Insurance Marketplace.

Not surprisingly, the IRS administers the tax provisions included in this new law.

When it comes to your tax return, there are some benefits that come along with the ACA; for example, when you get health insurance through the Marketplace, you may eligible for advance payments of the premium tax credit. This will immediately help lower your monthly premium!

But, of course, when it comes to a law that requires mandatory insurance, you're inevitably paying out money somehow — whether or not you want to. If you don't have coverage by March 31st (whether from the Marketplace or your current employer), a fine may be in your future!

Additionally, people without health coverage who choose to pay the penalty will also have to cover the entire cost of all medical bills — this leaves them unprotected from excruciatingly high medical bills that can potentially result in bankruptcy.

The tax penalty in 2014 is calculated one of two ways.

If you choose to remain uninsured, you'll be required to pay whichever of these amounts is higher:

1% of your yearly household income$95 per person ($47.50 for each child under 18)

By 2015, the penalty for living without coverage will go up to $325. Come January 1st, 2016, the penalty will more than double — the uninsured will have to pay $675 per year! And don't forget: if you opt to pay the penalty and your payment is late, the IRS can withhold your tax refund.

But remember: at Beaton Accounting, we can help! We know if you choose to remain uninsured, it's likely because you can't afford coverage — and chances are, you won't be able to afford the ever-rising penalties.

Stay on budget and navigate the ACA maze by working with tax experts that care!

Call TODAY to learn more.

(631) 921-6894

P.S.: Have you scheduled your QuickBooks training yet?

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