Robert Fishbein is the vice president and corporate counsel of Prudential Financial. He is also a tax attorney and speaker on tax-wise retirement planning strategies. BlackEnterprise.com recently spoke with him, and he shared pertinent information on new healthcare coverage requirements for the 2015 tax season and new Individual Retirement Arrangements (IRA) rules.
On the 2014 federal income tax return, filed in 2015, Fishbein says that it will be required through the Affordable Care Act that taxpayers indicate their families’ health coverage status. If you cannot confirm health insurance for 2014, you may be subject to a penalty.
There will be three categories of which filers must select the one applicable to them:
Your family had qualifying healthcare coverage. For most Americans, Fishbein says that you’ll simply check a box confirming that your household had coverage for 2014.
Your family did not have healthcare coverage and qualifies for an exemption. If you can’t confirm health coverage for 2014, you may be eligible for approved exemption. Some of the exemptions include recent filing of bankruptcy, acquired medical expenses for which you could not pay and suffering domestic violence. A list of all the exemptions can be found here.
Your family did not have healthcare coverage and does not qualify for an exemption. If your family did not have coverage and does not qualify for a penalty exemption, you will be subject to aÂ shared responsibility payment. This is aÂ penalty tax,Â whichÂ can be calculated using the Tax Policy Center Calculator.
Fishbein also shares that there is a new rule effective this year that only allows one IRA rollover a year. “This will result in some individuals to have a tax event that they didn’t think they were going to have,” he says. “The way around this is to do a direct transfer, not a rollover, where the money comes into your hands.”
He adds that it concerns him that Americans don’t understand IRA savings rules, as they are losing opportunity to save for retirement. The only eligibility requirement is that you earned income.
As you prep your taxes, check out these Black Enterprise resources for additional tips.