TurboTax Survey Reveals That Most Americans Are Unaware Of The Tax Implications Of Obamacare

TurboTax: US Residents Aware Of The Tax Impact Of Obamacare

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According to a recent survey, 48% of Americans are oblivious of the requirements for reporting their health insurance condition on tax returns they file for 2014.

Given that the 2014 tax-filing season is just weeks off, An Intuit Turbo-tax Health Survey that has been performed via the web on 2,000 adults by Harris Poll suggests that Americans remain incognizant of the relation between taxes and health care.

Under Obamacare or the Affordable Care Act, Americans must show that they are in possession of good insurance,according to the law, when filing their 2014 taxes or they will be penalized.

Although the majority of Americans without health insurance, 62 percent, understand that people without health coverage will have to pay a punishment, many are not aware of the reality that the deadline for avoiding this penalty has already passed. Any health coverage secured during the current enrollment period which runs through Feb. 15, will only be applicable for returns that are completed in 2016.

According to the TurboTax Affordable Care Act product leader, Sacha Adam, these numbers show that most US residents do not recognize the connection between taxes and health care even with open enrollment.

Other information that the survey has revealed:

9 in 10 Americans currently have insurance, but people who reside in Southern US states are far less likely to have this coverage than people in any other region.

Almost half of all US residents do not know that there are deductions known as premium taxation credits that are in place to make health ins coverage less costly for families with low to medium income.

Almost 3-quarters of all US residents who bought health coverage from the ‘Health Insurance Marketplace’ intend to renew this same coverage in the year to come.

With extensive dealings in the San Diego area, TurboTax by Intuit Inc, has provided a free, web-based asset at TurboTaxHealth.com.

Considering Your Home Mortgage Tax Deduction

Let Turbo Tax 2014 guide you at tax time.

Many people debate the merits of having a mortgage tax deduction when they file their taxes.

It makes sense to work at lowering your taxable income and getting all of the credits and deductions that you are entitled to, and claiming mortgage interest may be at the top of the list for you. Some homeowners think so much of this deduction that they forgo paying off their mortgage in spite of having enough money to do so. The question becomes whether it makes more sense to keep the savings or eliminate the mortgage debt entirely.

Home Mortgage Tax Deduction
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One example:

Q: I have enough financial resources to pay my mortgage debt in full and still have money left for emergencies. The savings account pays a low interest rate, and I am concerned that paying off my mortgage and losing this deduction will adversely affect me at tax time. I feel that I budget wisely, and I am committed to putting as much money in my retirement account as possible. What would you recommend?

Singletary: I would advise you to pay off your mortgage, but with the following caveat.

Review the items on your return, and remember that a tax credit is different than a mortgage deduction. Tax credits lower your taxable income, and deductions eliminate percentages of your tax obligation. You may pay more in taxes if you do not have a mortgage, but this amount may be much lower that you would pay in annual interest on your home loan. Keeping a mortgage just for a possible tax break does not make sense in the long run.

The caution about eliminating your mortgage refers to using your savings in the current economic climate. You should consider things like your job security, your health, and your ability to find work if you lost your job before you take steps to pay off your mortgage. You cannot predict when you may need an emergency fund of available cash, and tying up your money into your home equity may force you to borrow against your home or sell it. If you can continue to save for retirement and sustain a proper emergency fund, then I would recommend taking the steps to pay off your mortgage.

The Mortgage Interest Tax Deduction Is Being Eliminated

The mortgage interest tax deduction is going to be ditched. The president and CEO of the Mortgage Bankers Association, David Stevens, said the MBA is not religiously wed to the deduction. He said this is as long as any change is part of a tax reform proposal that is comprehensive and not just a one-off change.

Almost 44 million taxpayers deducted around $72 billion in mortgage interest from taxes, ending in the year 2014. However, by 2019, that figure may go up as high as $96 billion. This means this will be the largest tax breaks that individuals have ever taken.

Homebuyers who are middle-class benefit the most, as around 43% of taxpayers had adjusted gross incomes between $100K to $200K. Another 40% made less than $100K.

In the past, the MBA appeared to oppose attempts to reduce the deduction or to eliminate it. The statements by the CEO shows they are departing previous opposition.

Intuit Comes out With TurboTax for Health Care

Select the right Health Insurance Products: TurboTax Health Software by Intuit makes it easy for consumers to understand different health care options offered by Affordable Care Act (ACA).

Through their tax preparation software, TurboTax, Intuit has played an important role in simplifying the tax preparation process for the American tax payers. The same group is now coming out with software, TurboTax Health that lets American consumers understand the different health insurance coverage options available under the recently funded Affordable Care Act (ACA).

Icon from Nuvola icon theme for KDE 3.x.
Icon from Nuvola icon theme for KDE 3.x. (Photo credit: Wikipedia)

U.S Consumers can get in to the online portal of TurboTax health by following the link www.TurboTaxHealth.com . This tool is free to use and provides an interactive experience for the users by providing all the required information through an interview like conversation tone. Users would be able to appreciate the various features of ACA and what it has in store for the uninsured Americans.

Turbo Tax Health helps the American consumers in choosing the right medical insurance package that fits a particular individual in all aspects. Turbo tax Health comes with a detailed guide that contains explicit details regarding the various insurance options available to choose from. This product from intuit poses relevant questions to the consumer and gets their responses. Based on the user responses, the TurboTax health lists all the recommended health insurance options to the user. Turbo Tax primarily helps consumers to get answers to the following three important questions related to Affordable Health care.

1.Ascertain whether the American consumer would be applicable for 2013 Tax rebate and buy Health insurance option at discounted rates

2.Get the required clarification on how much it would cost an average American Consumer to buy an affordable Health care plan

3.Understand the possible consequences of not taking a health insurance policy

Once the individual has decided to purchase a specific health insurance plan, TurboTax Health would automatically connect the user with the state and Federal Level Health Exchanges. Users would also be provided access to the online portal of eHealth, America’s leading private health insurance market place.TurboTax health provides detailed answers to the individual questions raised by the individual on various aspects related to health insurance buying through its social community platform, called the AnswerXchnage Community.

About Intuit Software

Intuit Software has been in the business of creating financial management solutions for small business owners, individuals and accountants. TurboTax main product range includes QuickBooks, Quicken and TurboTax. These products makes it easier for small business owners and accountants to carry out payroll processing, personal finance planning and Tax Preparation and Filing. Intuit has around 8000 employees and has its presence in United States, Canada, United Kingdom and India among other countries.

The IRS Publication 17 And You

IRS Publication 17

IRS publication 17 deals with general instructions and guidance for people using form 1040. Paying income tax can be daunting but reading this publication will aid you in this process. The materials contained in this publication are the interpretation of the Internal Revenue Service of court decisions, treasury regulations, tax laws, and additions to the tax code. It also deals with general rules and reminders to help you file your return.

Paying taxes is required for both citizens and...
Paying taxes is required for both citizens and non-citizens. (Photo credit: Wikipedia)

IRS publication 17 can be extremely helpful for filing your tax returns.  If you are new to the workforce, it can tell you whether you have to file a return and if you do which form to use. It also gives you guidelines as to which records to keep, information on dependents, what is a filing status, and what exactly income is. E filing, how to check the status of a refund, and what to do if you make a mistake are also covered in this publication.

There are many flowcharts, everyday illustrations, and various scenarios of how the tax laws apply to real-life situations. For example IRS publication 17 illustrates tax questions; such as can you claim medical expenses you paid for a deceased spouse if you remarry and file jointly with your new spouse.  The answer is yes; you may claim these expenses. It also clarifies charitable donations with an example of a donated coat that originally cost $300 but the charity thrift store sold the coat for $50; the fair market value of the coat would be $50, which could be shown as a charitable contribution. However, if you are self-employed IRS publication 17 is useful but not all-inclusive; there are other publications that will give you further information on various tax laws and forms for business tax filing.

If you have questions about how to file, where to file, or how to determine income or expenses for IRS form 1040, IRS publication 17 should be the first place you look for information.

Surviving An IRS Audit

Surviving An IRS Audit

An IRS tax audit is requested when the tax filer submits tax information that doesn’t match with that submitted by employers, brokerage firms, banks and other institutions. This document-matching is only one means of identifying tax returns to be audited. The Discriminant Function System (DIF) is a point system the IRS gives each return rating it on its possibility of containing fraudulent information. Informants are still a popular means to detecting who has filed a fraudulent tax return and finally, self-employed persons and persons earning $200,000-1 million are often pursued when their returns appear suspicious.

Any of these circumstances could trigger an IRS audit. IRS Publication 17 is a guide for the individual tax payer that could help them stay off the IRS suspect list. The publication goes over the basics of filing a return. It covers every type of income, adjustments to income, profit gains and losses and deductions. It evaluates deductions and taxes and tax credits. Lastly, it provides a tax table and tax computation worksheet.

By following the IRS Publication 17 closely, the likelihood that you would encounter problems with your taxes dwindles significantly. An audit may still occur if mistakes are made or if you persist in being less than honest about your income. Keep in mind, that anything that can be verified will be verified.

If you are confronted with an IRS audit, the first step you should take is to contact your tax preparer, a good tax lawyer and review your returns before the actual audit. Avoid the IRS discovering improprieties in your returns. Point them out before they are brought to your attention and make compromises where ever possible to mitigate your cost.