Category Archives: Tax Advice

Obamacare is coming with some tax-filing surprises

Some great things about the Affordable Care Act (aka Obamacare): people can still get insurance when they leave a job or are laid off; children up to age 26 can get coverage under a parent’s plan; and pre-existing conditions can no longer be used to deny coverage to Americans.

Good changes all. But lots of components of the ACA are being run through the income tax code, and that is going to make some filers nuts this year.

As The New York Times reports, many people are going to find out when they do their tax returns that they owe a penalty for failing to get health insurance.

I can summarize how the ACA will affect taxpayers in five easy sentences:

  • Some taxpayers who received subsidies for health insurance are going to owe money because they have to repay part of a subsidy
  • Some taxpayers who received subsidies are going to get more money back, because they were entitled to a larger subsidy.
  • Some taxpayers who received no subsidy will now get one, but they’ll have to file a tax return for that to happen.
  • Some taxpayers who did not have health insurance will not have to pay a penalty because they’ll qualify for one of the more than 30 exemptions from penalty.
  • Some taxpayers will notice virtually no change in how their taxes are prepared.

Hold on to your hats; it’s going to be a bumpy ride this tax season.

Paying for college when you can’t pay for college

Every year I consult with clients who have children applying to college and who don’t have enough saved–or don’t have anything saved–to cover the costs of a higher education. In The New York Times, Ron Lieber has a good piece guiding parents–savers and non-savers alike–to figuring out how much a school might actually cost you…Continue Reading

Pay your taxes — or lose your driver’s license! NY State has a cool idea to convince reluctant tax-payers.

I regularly tell clients that cash-starved states have become very entrepreneurial and even aggressive in their tax collection efforts. If you earn money in a state, the tax department will probably be willing to go to court to collect income taxes even if you live hundreds of miles away. (I’m looking at you, New York…Continue Reading

IRS security puts taxpayer info at risk

The IRS won’t contact taxpayers by email, because of security concerns. When I am representing a client, auditors generally will not send me emails, for the same reason. And the Service regularly puts out notices telling taxpayers how to maintain their privacy and not get taken in by scammers claiming to be with the government.…Continue Reading

Corporate Cayman Islands tax shelters rip off U.S. taxpayers

*”Corporations are people, my friend.” –Mitt Romney, August 11, 2011 Statistic of the day: A single five-story office building is the registered address of more than 18,000 companies. How is that possible? Well, the building is in the tax haven of the Cayman Islands, and most of those businesses are registered there only for tax…Continue Reading