February 12, 2014

After a tumultuous beginning, the Affordable Care Act (ACA) became effective January 1, 2014.  The health care act continues to be a source of confusion for many individuals and small businesses. Some of the questions that illustrate the uncertainty encompassing the ACA are:

What is the ACA and how does it affect me?

Do I need to do anything if I have coverage through my employer?

What if I can’t afford coverage through the private insurance marketplace?

How do I get coverage through ACA?

Basically, the Affordable Care Act provides health insurance coverage for individuals and families. It also provides financial assistance options for those who qualify. It’s important to note that ACA mandates that Americans must have health insurance for themselves and their dependents beginning January 1, 2014. If individuals fail to have the minimum required health insurance for themselves and their family, they will be subject to penalties when they file their 2014 tax return in 2015. The good news is that it’s not too late to purchase health insurance and be in compliance with the mandate. If you enroll by March 31, 2014, you won’t have to pay the penalty for any month of 2014.

If you have qualified health insurance you don’t have to take any additional action. Examples of qualified health insurance are:

  • Medicare
  • Medicaid or Children’s Health Insurance Program (CHIP)
  • TRICARE for Life program
  • Veterans’ health care
  • Minimum qualified health insurance through an employer

Some individuals are exempt from the mandate. Examples of persons that are exempt include the following:

  • Incarcerated individuals
  • People whose incomes are so low they don’t have to file taxes
  • People with household income below 100% of the federal poverty level in states that did not expand Medicaid
  • People who are uninsured for a period that is less than 3 months
  • People for whom health insurance is considered unaffordable (where insurance premiums after employer contributions and federal subsidies exceed 8% of family income)
  • Undocumented immigrants
  • Members of certain religious groups and Native American tribes

If you are not currently covered by qualified health insurance and if you are not exempt from the mandate, you may qualify for a premium assistance credit that will help to offset the cost of the insurance. But in order to qualify for the premium assistance credit, the health insurance must be purchased through the Health Insurance Marketplace. This tax credit can help make purchasing health insurance coverage more affordable for people with moderate to low incomes. For more information about your coverage options, financial assistance and the Marketplace, visit

You may qualify for the credit if you meet all of the following:

  • You buy health insurance through the Marketplace;
  • You are ineligible for coverage through an employer or government plan;
  • You are within certain income limits;
  • You file a joint return, if married; and
  • You cannot be claimed as a dependent by another person

For additional information on insurance options visit these links:

If you’re under 65 years of age, follow this link to find out if you may qualify for the premium assistance credit:

If you’re 65 years and older, follow this link to find out more information:

Don’t hesitate to call me at 479-966-4277 if you have any questions regarding tax implications of the ACA.

Are you expecting a tax refund and want to file early to get it?  Unfortunately, due to the government shutdown last October, the 2014 tax filing season will not open until January 31, 2014. The IRS explained that the closure occurred during the peak period for preparing IRS systems for the 2014 filing season. Since about 90 percent of IRS operations were closed during the shutdown, with some major work streams closed entirely during this period, it put the IRS nearly three weeks behind its timetable for being ready to start the 2014 filing season. The IRS indicated that there are additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention.

The IRS cautioned that it will not process any tax returns before Jan. 31st, so there is no advantage to filing on paper before the opening date. E-filing is a much more efficient and faster way to file your tax return.

However, the good news is that once you have received all of your tax documents (e.g. W-2’s, 1099’s, etc.) you can bring all of your information to your tax preparer so that your return can be processed internally and be ready to go on the e-filing date of January 31st. I have attached a tax organizer that will be helpful in organizing your tax documents and may help you think of deductions that you might have overlooked.

Even though there’s a delay in the e-filing processing date, the April 15th tax deadline is still in force since that date is set by statute. If taxpayers need additional time to file their tax returns, they can request an automatic six-month extension to file, thus deferring the tax due date to October 15th for individuals. But taxpayers should pay any taxes due by April 15th so that they won’t be subject to penalties and interest. Please don’t hesitate to contact me at 479.966.4277 if you have any questions or need assistance with your tax filing needs.

As the year-end approaches, many are considering making donations to their favorite organizations. In order for those contributions to be tax-deductible, certain criteria must be met. I’ve listed some information below to assist you as you consider making charitable donations.

Tax Deductible Contributions:

  • Qualified organizations including churches, mosques, temples, synagogues and other religious organizations.
  • Boy/Girl Scouts, Red Cross, Salvation Army, United Way, other 501 c 3 organizations
  • Nonprofit schools and hospitals
  • Charitable travel. Many people overlook this deduction, but travel expenses including transportation, meals and lodging are deductible if there is not a significant element of personal pleasure, recreation or vacation in the travel. Car-related expenses are deductible using actual cost or the standard charitable mileage rate of 14 cents per mile.

Following are a few examples of some donations that are not deductible:

  • Money paid to individuals
  • Political groups or candidates for public office (Arkansas offers a $50 political contribution tax credit)
  • Homeowners’ associations
  • Sports clubs/groups, civic leagues, chambers of commerce

For more information, see Publication 526, Charitable Contributions. To determine if the organization that you have contributed to qualifies as a charitable organization for income tax deductions, review Exempt Organizations Select Check on the website.

Don’t overlook the fact that cash donations must be substantiated with either bank records (e.g. canceled check or bank statement), or written acknowledgement from the charity documenting the contribution’s amount and date. If a single contribution is $250 or more, the organization must provide written acknowledgement stating whether the charitable organization provided any goods or services in exchange for the contribution. If goods or services were provided, the FMV should be noted. The acknowledgement must be received by the date the tax return is filed (or the extension date of the tax return).