Tax Software and ACA Calculations

[wolf]

ACA is included in mine too! The problem is that when there are two legit 1095-A's associated with your return, you get the message "Since you have more than one Form 1095-A, you'll need to get our next update to complete your return."

Now I notice too that when I open the program, I see that I need to wait (at least) a month before any chance of them getting this fixed.

A few reasons. First, they owe me money. Second, it would take some "play" out of the financial aid award; they like it if you've already filed your taxes, and don't use estimates. Third, I'd like to just put this behind me. Fourth, reduce the chore. By that I mean I worked my taxes before the end of the year to tune my tIRA to Roth number, ran the numbers in this year's program in January, and so it's all in the front of my mind. If I let that data "page out", then it will be more of a chore to re-do everything at some later date, after I've forgotten it all again.

But alas, I probably don't have any choice, at least before March 12.

OP:

Agree, ACA, filing issues are a mess. Whole process is dysfunctional, if you had any changes to your health insurance during the year.

In my case, I just, Read the IRS instructions for form 8962. Use the override feature on H&R block. Filled in the Correct dollar amounts.

The dollar amounts on the 1095A, were not correct. But I could figure out what they should be. So I entered the correct dollar amounts on 8962.

Again, if I do not receive corrected 1095A from ACA, will just file with IRS with letter of explanation.

Do not want to file for an extension. Just more paperwork to keep track of.
Plus I have to pay income taxes anyway for 2014.

Also, as mentioned earlier, Past experience with ACA, not good. Delays and
more errors on their corrections.

My gut feel, the IRS, is going to let a lot of ACA issues slide this year and
probably next. Cannot see how the IRS can handle the volume. Calif. is suppose to be one of the better states, and yet, from personnel experience,
still to many problems.

Software is not up to par.

 

[sengsational]

Indeed...not up to par. Nothing stopping me from printing and mailing, but e-file just ain't gonna work with this bug. I wonder if I could somehow join the two 1095-A forms and enter them as one. I have not looked at the mechanics of the forms, and probably won't unless Block leaves the functionality out of the March 12 release.

 

[sengsational]

Family Size Change Has Me Baffled

...
In my case, I just, Read the IRS instructions for form 8962. Use the override feature on H&R block. Filled in the Correct dollar amounts.

The dollar amounts on the 1095A, were not correct. But I could figure out what they should be. So I entered the correct dollar amounts on 8962.
...

I have finally come to the conclusion that even if I wait until the next release, I'm not going to be satisfied with the way the software works (or doesn't work). I played with it just now, and if you answer any of the questions "wrong", it gives you a message that you need to do the form manually. So the only way this software works is if filling out the 8962 manually would be drop-dead easy. If it's hard (one of the alternative conditions), they let you twist in the wind.

So, @wolf, I bit the bullet, followed your lead, and looked at the 8962 instructions. It's a CF, IMHO.

Simple scenario:

1. Family of 4 buys a policy on healthcare.gov in 2013 for 2014.
2. Someone in the family moves out, mid 2014, gets a job with health insurance.
3. As required, healthcare.gov is informed that the family size is now 3.
4. The old policy gets stopped and a new policy, with 3 people, begins.

And that leads to an utter mess when one attempts to map it into the 8962!

The top of 8962 calculates a number for all months of "Monthly Contribution Amount" (MCA), line 8b. It's based on MAGI and current family size (3).

But for the first five months, the family size was 4, and the MCA for a family of 4 is about 81% of the MCA for 3.

Column C is really the only "moving part" in the 12 through 23 chunk of the form, since the rest comes from the 1095A's or is calculated.

So although I can sit here and say that for the months where we had 4 people on the policy (and in the family), I should use .81 * the MCA from line 8b (in those months of "Column C"), I can't find where in the instructions it says lays out this rather obvious and comon scenario. I'm sure they thought of it, but their wording just gets past me, apparently. Just gotta love the IRS!

 

[timmar]

I have 3 1095's for 2014 (a very interesting year). Both TaxACT and TurboTax (wife got a free TT this year after I started with TaxAct) handled them just fine and merged properly. But I have not submitted electronically yet.

 

[MBSC]

Simple scenario:

1. Family of 4 buys a policy on healthcare.gov in 2013 for 2014.
2. Someone in the family moves out, mid 2014, gets a job with health insurance.
3. As required, healthcare.gov is informed that the family size is now 3.
4. The old policy gets stopped and a new policy, with 3 people, begins.

And that leads to an utter mess when one attempts to map it into the 8962!

The top of 8962 calculates a number for all months of "Monthly Contribution Amount" (MCA), line 8b. It's based on MAGI and current family size (3).

But for the first five months, the family size was 4, and the MCA for a family of 4 is about 81% of the MCA for 3.

Column C is really the only "moving part" in the 12 through 23 chunk of the form, since the rest comes from the 1095A's or is calculated.

So although I can sit here and say that for the months where we had 4 people on the policy (and in the family), I should use .81 * the MCA from line 8b (in those months of "Column C"), I can't find where in the instructions it says lays out this rather obvious and comon scenario. I'm sure they thought of it, but their wording just gets past me, apparently. Just gotta love the IRS!

If you did not claim the person who moved out as an exemption on Form 1040, they are not part of the "tax family" on Form 8962. See the Instructions for Form 8962, Part 2, Line 9 and complete Table 3 in the instructions. Depending on the answers, you may need to complete Section 4 of Form 8962 in order to share premiums/tax credits/subsidies with the person who moved out.

 

[sengsational]

If you did not claim the person who moved out as an exemption on Form 1040, they are not part of the "tax family" on Form 8962. See the Instructions for Form 8962, Part 2, Line 9 and complete Table 3 in the instructions. Depending on the answers, you may need to complete Section 4 of Form 8962 in order to share premiums/tax credits/subsidies with the person who moved out.

Thanks SC, for the guidance. You got it right: she was no longer part of the tax family at year end, but she was part of the tax family for the first half of the year. Maybe I just haven't had the patience to wade through the instructions for sharing premiums/tax credits/subsidies. I have tried, though. All of the examples seem to be catering to dysfunctional situations (divorce, who claims the kid, etc), and the healthy case where a kid grows up, gets a job, and moves out, well, that doesn't happen enough for them create an example for that one!

I did find a segment in the instructions that's really clearly written and is easy to understand:

Policy shared by two or more tax families. If you and one or
more other tax families enrolled in a single qualified health plan
as two or more tax families and remained two or more tax
families for the year, you may have to allocate the enrollment
premiums among the families. However, if a family that expects
at enrollment to be a single tax family is two or more tax families
at filing, for example as a result of a family member claiming his
or her own personal exemption, see Policy shared with an
individual for whom another taxpayer claims a personal
exemption, earlier.

 

[sengsational]

From the OP:

...Does (the tax software) handle the ACA subsidy balancing well?

I'll answer my own question as a "no" again, at least for H&R Block.

If you answer any of the yes/no questions "wrong" (leading to any of the allocations), you get an error message, the software abandons you, and you're left to twist in the wind.

Even if you answer those questions "right", if you have more than one 1095A, you are left waiting another month for the next update in order to e-file. And that's what they said last time and didn't deliver.

I fumbled through the 8962 myself, printed and mailed.

 

[frank]

try taxhawk online and play with it. it doesn't cost anything and has worked great for me over the last few years.