Despite Congress’s efforts, neither a repeal of the Affordable Care Act (“Obamacare” or “the ACA”) nor a tax reform bill have made it into law.  As such, the individual insurance mandate is still in effect for the 2017 tax year.  On the 2016 tax returns, the IRS gave us the option leave blank the answer to the healthcare coverage question.  This put the onus on the IRS to come after taxpayers to enforce assessment and payment of the ACA mandate penalty.  However, for the 2017 year, the IRS has stated that it will no longer accept tax returns that have left the healthcare question blank.  So, if you do not have healthcare coverage and don’t have an acceptable exemption from the penalty, I will have no choice but to answer the healthcare coverage question “no” and calculate the penalty.

Here is a link to the IRS’s summary of the healthcare law and how it affects most taxpayers.  I’ve boiled down most of the highlights:

• If you have health insurance through your employer, they will likely issue you a Form 1095-C.  Add this to your tax data and give it to me when we do your tax return.  No further information is generally required.
• If you purchased insurance through the individual market (not on the Healthcare Marketplace Exchanges), you should receive a Form 1095-B.  I will need this form and a summary of the health insurance premiums you paid out of pocket.
• If you purchased insurance through the Healthcare Marketplace Exchange (www.healthcare.gov), you should receive a Form 1095-A.  I will need this form, but no further information is generally required.
• If you are claiming a health coverage exemption issued by a religious health-sharing provider or you have an Exemption Certificate Number issued by the Marketplace, please include applicable documents with your tax data.

Some of you may be wondering about these health coverage exemptions.  Here is a link to the Marketplace’s 2017 health coverage exemptions and how to apply for them, and here is a link to the IRS’s tool to help you determine if you are eligible for a health coverage exemption.  If you think you may be eligible for an exemption, please visit both of those sites.  Print out the results and include them with your tax data so we can make sure we report it correctly.

Finally, a reminder that open enrollment for 2018 coverage on the Healthcare Marketplace ends December 15, 2017.  Since my crystal ball is on the fritz, I have to advise based on the laws currently in effect.  So, my advice is to enroll in a health insurance plan now to avoid a penalty on the 2018 tax return!

It’s now the evening of April 17th and I am pretty much done with tax busy season.  I even did my own extension.  I always forget that I am also a taxpayer and have this irritating tax filing obligation.  All I have left now are a few stragglers who haven’t returned a Form 8878 or 8879, the “permission slip” I need from my client before I can efile.  Unfortunately, this year I did not reach my goal of filing all my clients’ returns timely.  I had to file about 15 extensions, though the vast majority of them are mostly done and/or need to go through final review.  This year, many of my clients weren’t ready with their tax data until late March (or even early April).  When this happens, it puts me in a real bind because taxes aren’t the only one of my jobs that go into busy season in the spring.  I have 22 violin and viola students that need to be taught, opera starts up again, and Easter (and other) gigs roll in.  I simply run out of time.  When we have a 20 hour opera week, and I have to teach or deal with student issues for about 20 hours, that’s 40 hours before I touch a tax return.  I had a few weeks in March that were close to 60 hours before I even picked up a tax return.  Given the number of tax returns I have to prepare and the average number of hours for each return, I need about 120 hours to complete all these returns.  If I only have about five weeks to do all the returns (seriously I didn’t even get the first couple until the first week of March), that’s over 20 hours a week.  There aren’t enough hours in the day or enough brain cells in my head.  I finished as many as I could and had to get a little more time for the rest.

During tax season, I find it interesting how my clients react when I tell them they owe tax or they have a refund.  Some people completely freak out if I tell them they owe a certain amount (that’s so much!), while others are happy to owe the same (is that all?).  I have some who will never be happy with anything I tell them.  Any amount to owe is too much, and any amount to get back is either not enough or they resent having paid in too much.  I have to remind myself that I am only the messenger, and it is generally not my fault that anybody owes tax.

Now, I’m looking forward to the summer.  I leave town eight weeks from now.  That means I’ve got about seven weeks to get all these tax returns wrapped up.  The good news is that my other jobs start to lighten up in May, so I should finally have uninterrupted time to get some work done.  The bad news is that I probably won’t get much of a break until I cross the state line.