If you are like most Americans and have no desire to allow the government to hold on to the money they owe you or you want to make sure you pay as little as possible in taxes, it is essential to become aware of the different changes that could impact you financially for each new tax season. On January 20, 2015 the Internal Revenue Service will begin to accept the first of millions of tax returns that will be filed by hard-working Americans over about three months. With a little understanding of the new tax laws, your tax preparation could be easier and less stressful than you imagine.      

The Affordable Care Act . . . Do You Owe A Penalty For Not Having Health Insurance?

In 2014, one of the biggest and most delayed events was the provision of health care to all Americans. Unfortunately, there are still some people who waited too long to get it or did not get it for personal reasons. Regardless, most people who did not have health insurance in 2014 will be charged extra on their taxes.

This year, it is the maximum amount for fines will be

  • The greater of 95 dollars OR
  • 1% of the family income per person     

The fees for non-compliance accrue monthly for anyone in the family lacking health insurance, The deadline, which was December 15, required new customers to sign up by then in order to provide insurance protection to new customers by New Year's Day. If you missed the date, you may still be able to get coverage, but you should also expect to pay the fine on your tax return.

That fine doubles in 2015, so your taxes in 2016 could includes fines up to 2% of the total household income for each uninsured person in your family. Therefore, it is better financially to get and stay insured whenever possible.

Do You Want To Minimize Your Health Care Expenses?

For families with significant health care expenses, the use of flexible spending accounts can be invaluable. Because it provides access to funds that you can use to pay approved medical costs before taxes, it can represent a significant savings for some families.

Fortunately, this year, the amount that you can contribute, as an employee has increased by 50 dollars. You can now contribute up to 2,550 dollars, starting in 2015. It is important to note that this change is thought to be the result of some changes associated with the Affordable Care Act, and will not impact your taxes until you file in 2016. 

In conclusion, in order to maximize your refund or minimize your payment, it is crucial to understand all the complexities of the new or modified tax laws. Otherwise, the safest option, in order to prevent expensive errors, is to allow a trained professional to prepare your taxes for you.