Bomar Law Firm, LLC  - Trusted Experience. Focused Results.
404.841.6561
View Our Practice Areas

Health care tax credits could affect refunds when income rises

Atlanta taxpayers may be interested in some of the possible effects of IRS health care tax credits. In some cases, these credits may seriously affect a person's expected tax refund.

Almost 7 million U.S. households are taking advantage of health care tax credits under the Affordable Care Act. On average, this credit amounts to $3,168 for the year, or a monthly credit of $264. These credits are based off of a person's estimated income for the year. When that income goes up, however, this could affect the amount of the credit. This, in turn, could lead to a lower-than-expected tax refund come April 2015.

It has been noted that having a health care tax credit reduced by just 10 percent could end up reducing the tax refund by hundreds of dollars. The Obama administration claims that it is attempting to get the word out regarding updates to expected income to keep the tax credit at the proper level. However, some believe that they are not effectively getting the message across that a failure to update could affect a person's tax liability. Others argue that the new tax forms provided by the IRS to calculate these health care tax credits are overly complicated and sometimes require different calculations each month. Using these health care credits will bar a taxpayer from using the more-simplified Form 1040EZ, as well, which many taxpayers are used to.

When complex tax issues are not properly handled, the IRS may institute an audit to discover any errors made in a person's taxes. This audit could eventually result in a tax lien that could affect a person's assets or wages. An attorney with experience in audit defense may be able to help a taxpayer through this process and assist in the elimination of penalties.

Source: Access North GA, "Tax refunds may get hit due to health law credits", August 24, 2014

Source: Access North GA, "Tax refunds may get hit due to health law credits", August 24, 2014

No Comments

Leave a comment
Comment Information

100 Galleria Parkway SE | Suite #480 | Atlanta, Georgia 30339 | Phone 404-841-6561 | Toll Free 800.765.2779 | Email Us | Get Directions

Back To Top