The Internal Revenue Service offers an assortment of online services, including features that help taxpayers understand how the Affordable Care Act will affect them at tax time.

Q:       Will the Affordable Care Act impact my tax return?
A:        This year’s tax return will include new questions to include provisions of the Affordable Care Act (ACA). Most taxpayers (about three-fourths) will just check a box to verify that they have health insurance coverage, but some taxpayers will have to take some additional steps. Visit IRS.gov/aca to learn about the premium tax credit, the individual shared responsibility requirement and other tax features of the ACA. The individual shared responsibility requirement included in the Affordable Care Act is new to the Form 1040 this filing season.

Q:       What does the ACA require taxpayers to do?

A:        The Affordable Care Act requires that all taxpayers and each member of their families have qualifying health insurance coverage for each month of the year, or qualify for an exemption or make an individual shared responsibility payment when filing the federal income tax return. Some moderate-income taxpayers may also qualify for financial assistance to help cover the cost of health insurance purchased through the Health Insurance Marketplace. Taxpayers will fall into one or more of the following categories:

·       Check the box. Most taxpayers will simply check a box on their tax return to show that each member of their family had qualifying health coverage for the whole year. No further action is required. Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Taxpayers can use the chart on IRS.gov/aca to find out if their insurance counts as qualifying coverage. 

·       Exemptions. Taxpayers may be eligible to claim an exemption from the requirement to have coverage.  Eligible taxpayers need to complete the new IRS Form 8965, Health Coverage Exemptions, and attach it to their tax return.  Taxpayers must apply for some exemptions through the Health Insurance Marketplace. However, most of the exemptions can be obtained from the IRS when filing a return.

·       Individual Shared Responsibility Payment. Taxpayers who do not have qualifying coverage or an exemption for each month of the year will need to make an individual shared responsibility payment with their return. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.

·       Premium Tax Credit.  Taxpayers who bought coverage through the Health Insurance Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. This form should be saved because it has important tax information. Taxpayers who should receive the form but haven’t received it by early February should contact their Marketplace. The IRS does not have access to this information.

           
            Taxpayers who got advance payments of the premium tax credit must file a federal income tax return. These taxpayers need to reconcile their advance payments with the amount of premium tax credit they’re entitled to based on their actual income. Some may see a smaller or larger tax refund or tax liability than was expected. Use IRS Form 8962, Premium Tax Credit (PTC), to calculate the premium tax credit and reconcile the credit with any advance payments.

            The IRS has set up a special section at IRS.gov/aca with more information about the Affordable Care Act and the 2014 income tax return.

Q:       Can taxpayers receive help in meeting the health care requirement?
A:        Low- and moderate-income taxpayers can get help meeting this health care requirement and filing their return for free by visiting one of the more than 12,000 community-based tax help sites staffed by more than 90,000 volunteers that participate in the Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) programs. To find the nearest site, use the VITA/TCE Site Locator on IRS.gov.

            The IRS also reminds taxpayers that a trusted tax professional can also provide helpful information about the health care law. A number of tips about selecting a preparer and national tax professional groups is available on IRS.gov.

The information for this “Law You Can Use” column was provided by the Internal Revenue Service. It was prepared by the Ohio State Bar Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       Weren’t estate taxes eliminated in Ohio?

A:        While the Ohio estate tax was repealed effective January 1, 2013, a decedent’s estate may have to pay a federal estate tax if the gross estate is more than $5.34 million dollars (“the exempt amount”).

Q:       What is the tax rate for estates that exceed the exempt amount?

A:        The tax rate is 40 percent.  This rate also applies to generation-skipping transfer tax (when, for example, a distribution is made from a grandparent to a grandchild).

Q:       Can any tax deductions be taken from the decedent’s gross estate?

A:        Yes. Typical deductions include expenses associated with the decedent’s funeral and burial, debts and obligations, gifts to charities and most transfers to the surviving spouse.

Q:       Should an estate file a federal estate tax return if all assets are transferred to the surviving spouse?

A:        Maybe. When the decedent’s gross estate exceeds the exempt amount, a return (Form 706) must be filed even if the taxable estate is zero. Also, the estate may elect to file a return when the gross estate is less than the exempt amount. Doing so may allow the surviving spouse to leave combined net assets of $10.68 million dollars in the estate, but the family would not have to pay federal estate taxes. 

            For example, let’s say a man dies and leaves $4 million dollars to his wife. His wife does not have to file a federal estate tax return.  If the wife has $4 million dollars of her own assets plus the $4 million dollars she inherited from her husband, her gross estate would be $8 million. Approximately $3 million dollars of this $8 million would be subject to federal estate taxes. However, if she files a federal tax return at the time of her husband’s death, she can claim the unused exempt amount of $4 million dollars for her husband as well as her own exempt amount. This will leave her with a combined $8 million dollar exempt amount, which will eliminate the federal estate tax.

Q:       Will accounts held as “transfer on death” or “payable on death” avoid federal estate tax?

A:        No. The transfer of property can be accomplished quickly after a person’s death through the titling of assets as “transfer on death” or “payable on death,” but most of these assets will not escape estate tax liability.

Q:       Can I give all of my property away during my life to avoid estate taxes?

A:        No. The federal tax structure is considered a “unified” estate and gift tax system. This means that transfers made while you are alive are added together with those that are distributed when you die to determine if your total assets exceed the exempt amount. This is called a lifetime computation.

Q:       How does the federal gift tax work?

A:        Under the current law, an individual can give $14,000 (“the annual exclusion”) to another person (the “donee”) without filing a federal gift tax return. The annual exclusion is based on the amount of the gift made to each donee and not on the total amount given by the donor. For example, one parent can give $14,000 to each of his or her four children (a combined gift of $56,000) without filing a gift tax return. If the donor is married, the annual exclusion can double (called “gift splitting”). Thus, this couple could give $28,000 to each child without filing a gift tax return even though only one spouse made the gift. When the aggregate amount exceeds $14,000 per donee, a gift tax return (Form 709) must be filed by April 15 following the calendar year. The excess amount over the $14,000 reduces the future exemption amount available when the donor dies.

Q:       I received a gift of property from my parents. Do I have to pay taxes on its value?

A:        No. You do not have to report the gifted asset as income. However, if you sell the property at a later time, then you will have to pay income taxes based on your parents’ basis. “Basis” is the amount a person pays to purchase a property plus whatever the person spent to improve the property. For example, let’s say a couple paid $15,000 for their home in 1950.  When they deeded the house to their only son in 2014, its value was $100,000. When their son sells the home, he will have a capital gain of $85,000. The son will have to pay taxes on this capital gain amount. 

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by attorney James B. Curtin of the Columbus firm, Hrabcak & Company, L.P.A. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       I heard legally married same-sex couples will now be treated as married for federal tax purposes. I was married in a state that allows same-sex marriages, but recently moved to a state that does not recognize our marriage. Will the IRS still recognize us as married for tax purposes even if our current state of residence does not?

A:        Yes. Due to a recent U.S. Department of the Treasury and Internal Revenue Service (IRS) ruling that takes effect Sept. 16, 2013, same-sex couples who were legally married in jurisdictions recognizing their marriages are to be treated as married for federal tax purposes. The ruling applies even if the couple lives in a jurisdiction that does not recognize same-sex marriage. This ruling implements federal tax aspects of the June 26, 2013 U.S. Supreme Court decision that invalidated a key provision of the 1996 Defense of Marriage Act.

Q:       What “federal tax purposes” does the ruling cover?
A:        Under the ruling, same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Q:       Does the ruling apply to registered domestic partnerships?

A:        No. The ruling covers any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country, but it does not apply to registered domestic partners, who are not married under state law.

Q:       How should legally married same-sex couples file their 2013 federal income tax return?

A:        Beginning Sept. 16, any return filed by legally married same-sex couples generally must use either the “married filing jointly” or “married filing separately” filing status. Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations. 

Q:       What is the statute of limitations for filing a tax refund claim?

A:        Generally, you have three years from the date the return was filed or two years from the date the tax was paid, whichever is later, to file your claim. This means that in 2013 you can file refund claims for tax years 2010, 2011 and 2012. In some special circumstances (such as signing an agreement with the IRS to keep the statute of limitations open), taxpayers may be allowed to file refund claims for tax years 2009 and earlier.

Q:       I bought same-sex spouse health insurance coverage from my employer on an after-tax basis. Do I get any credit for that?

A:        Yes. You may treat the amounts you paid for that coverage as pre-tax and exclude those amounts from your taxable income.

Q:       How do I file a refund claim?

A:        To file a refund claim for income taxes, you should use Form 1040X, Amended U.S. Individual Income Tax Return. To file a refund claim for gift or estate taxes, use Form 843, Claim for Refund and Request for Abatement. For information on filing an amended return, see Tax Topic 308, Amended Returns, available on IRS.gov, or the Instructions to Forms 1040X and 843. You can find information about where to file your amended returns in the form instructions.

Q:       Will employers receive guidance about getting refunds for past benefits provided to same-sex spouses?

A:        Yes. The U.S. Treasury and the IRS intend to issue streamlined procedures for employers wishing to file refund claims for payroll taxes paid on previously taxed health insurance and fringe benefits provided to same-sex spouses. The Treasury and IRS also intend to issue further guidance on cafeteria plans and on how qualified retirement plans and other tax-favored arrangements should treat same-sex spouses for periods prior to the revenue ruling’s effective date of Sept. 16, 2013. Other government agencies also may provide guidance related to same-sex marriage on the federal programs they administer.

Q:       Where can I get more information?

A:        Visit www.IRS.gov for Revenue Ruling 2013-17, and to find updated Frequently Asked Questions (FAQs) about same-sex couples, registered domestic partners and individuals in civil unions.

This “Law You Can Use” column was prepared by the Ohio State Bar Association (OSBA). The information was provided by the Internal Revenue Service (www.IRS.gov). The column offers general information about the law. Seek an attorney’s advice before applying this information to a legal problem. For more information on a variety of legal topics, visit the OSBA’s website at www.ohiobar.org.

Q:       I just got married, and am wondering how that might affect my taxes.
A:        A change in your marital status can affect your taxes. Often, you can benefit from this change by filing your taxes jointly rather than separately. The IRS provides the following tips to help you prepare for your new status as a married person:

• It is important that the names and Social Security numbers that you put on your tax return match your Social Security Administration records. If you’ve changed your name, report the change to the SSA. To do that, file Form SS-5, Application for a Social Security Card. You can get this form on the Social Security Administration website at SSA.gov, by calling 800-772-1213 or by visiting your local SSA office.
  
  
• If your address has changed, file Form 8822, Change of Address, to notify the IRS. You should also notify the U.S. Postal Service if your address has changed. You can ask to have your mail forwarded online at USPS.com or report the change at your local post office.
  
  
• If you work, report your name or address change to your employer. This will help to ensure that you receive your Form W-2, Wage and Tax Statement, after the end of the year.
  
  
• If you and your spouse both work, you should check the amount of federal income tax withheld from your pay. Your combined incomes may move you into a higher tax bracket. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4, Employee's Withholding Allowance Certificate. See Publication 505, Tax Withholding and Estimated Tax, for more information.
  
  
• If you didn’t qualify to itemize deductions before you were married, that may have changed. You and your spouse may save money by itemizing rather than taking the standard deduction on your tax return. You’ll need to use Form 1040 with Schedule A, Itemized Deductions. You can’t use Form 1040A or 1040EZ when you itemize.
  
  
• If you are married as of Dec. 31, that’s your marital status for the entire year for tax purposes. You and your spouse usually may choose to file your federal income tax return either jointly or separately in any given year. You may want to figure the tax both ways to determine which filing status results in the lowest tax. In most cases, it’s beneficial to file jointly.

Q:       Where can I get more information?
A:        For more information about these topics, visit IRS.gov. You can also get IRS forms and publications at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

This “Law You Can Use” column was prepared by the Ohio State Bar Association (OSBA). The information was provided by the Internal Revenue Service (www.IRS.gov). The column offers general information about the law. Seek an attorney’s advice before applying this information to a legal problem. For more information on a variety of legal topics, visit the OSBA’s website at www.ohiobar.org.

Q:       I just realized that I could have claimed a tax credit this year, but I’ve already filed my return. Is there anything I can do?

A:        Yes. You can file an amended return using IRS Form 1040X. If you are eligible to claim a credit, or perhaps a deduction that reduces your tax bill, you should do so.

Q:       What if I’ve made a mathematical error on the tax return I already submitted?

A:        Generally, you do not need to file an amended return to correct mathematical errors because the IRS will automatically make such corrections and send you a printed notice. Also, amended returns should not be filed for forgotten tax forms such as W-2s or schedules; the IRS normally will mail you a notice asking you for any such forms if they are needed.

Q:       What if I’ve forgotten to report income?

A:        If you’ve forgotten to report income, you should file an amended return as soon as possible. The sooner you correct such a mistake, the lower any possible penalties and interest you may owe will be. Reporting the additional income on a 1040X form could save you money in the long run.

Q:       Can I submit a 1040X form electronically?

A:        No. Form 1040X must be filed using the paper form and mailed in. If you are amending more than one tax return, each 1040X form should be mailed in a separate enveloped addressed to the appropriate IRS processing center.

Q:       How much time do I have to file an amended return?

A:        An amended return must be filed within three years from the date of the original return or within two years from the date taxes were paid, whichever is later.

Q:       How long will it take the IRS to process my amended return?

A:        According to the IRS, it generally takes between eight and 12 weeks to process an amended return.

Q:       Where can I find more information?

A:        For more information about amended returns or to print a copy of Form 1040X, go to www.irs.gov and click on the link to Forms and Publications, or visit the IRS YouTube channel: www.youtube.com/watch?v=JUjC0avoZ_I.

The information for this “Law You Can Use” column was provided by the Internal Revenue Service. It was prepared by the Ohio State Bar Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.