Below you will find ten new questions we need to ask each of our clients before we can prepare their tax return.

January 2015 is fast approaching and the next phase of the Affordable Care Act is becoming a reality. The IRS has been assigned the task of collecting the additional taxes required which puts tax prepares right in the thick of it.

The IRS has released the draft copies of Form 8962 and Form 8965 instructions.

Form 8965 will be used to report any exemptions from the requirement to have Minimum Essential Coverage (MEC). For any months an individual or any members of their tax household had neither MEC or an exemption we must figure out their shared responsibility payment on the worksheets included in the instructions for Form 8965. This worksheet is not sent in with the tax return. The Instructions include 12 pages with various worksheets.

Form 8962 will be used to calculate the correct Premium Tax Credit (PTC). This form will be required for any clients that received Advanced Premium Tax Credits. It will reconcile any advance payments with the actual credit amounts and the client will either receive an additional amount of the Premium Tax Credit or have to pay back any overpayment of the Advanced Premium Tax Credit already received.  Any additional credit due will be reported on Form 1040 line 69. Any repayments will be reported on Form 1040 line 46. Anyone who has received PTC will be required to file a return even if they are below the filing threshold. The instructions include 15 pages with various worksheets.

This is where Form 1095 comes in. Clients that have medical coverage should receive Form 1095. They will receive the form either from their employers or from the marketplace. The form is required to be sent in by January 31st each year. For clients with insurance we need this form before we can  prepare the return. Form 1095 will tell us what months the client was covered and the amount of any Advance Premium Tax Credit that was already received.

It will be our job to gather the information from our clients to properly report the information on their tax return. I will be changing my interview questions with the clients to incorporate  medical insurance and Premium Tax Credit information needed to prepare their return. Some of the questions will include the following:

1. Did they have medical insurance?
2. Did all members of their tax household have medical insurance?
3. Were they covered for all 12 months?
4. Where did they get their coverage?
5. Have they moved to a different location?
6. Has their marital status changed?
7. Have their dependents changed?
8. Did they receive any Advanced Premium Tax Credits?
9. If so have they received Form 1095 either from the Health Insurance Marketplace or their employer?
10. Do they qualify for an exemption?