Everyone groans after the holidays have passed and we face tax season. The arduous paperwork process and the prospect of paying the government even more than what it’s taken from us all year long, is not something any American looks forward to. Tax season is about to get even worse next year, thanks in big part to the gift that keeps on giving headaches: ObamaCare.
IRS officials and tax experts warned this week that due to budget shortfalls and the dearth of reporting needed for ObamaCare, the tax filing season in 2015 will be even more of a nightmare than is usually the case. Furthermore, don’t expect much –if any- help from the IRS, which is claiming it just doesn’t have the manpower.
This is the first year that two major provision of ObamaCare kick in: the premium tax credit and the individual shared responsibility payment–on Form 1040. Americans who qualified for a taxpayer-funded subsidy to offset the costs of their so-called “affordable” healthcare plans, will have to report and tax experts fear that the IRS won’t receive the accurate information from the health exchanges.
That “individual shared responsibility payment” is a sanitized way of saying a tax penalty. If you don’t carry healthcare coverage whether through an employer-sponsored plan or one you purchase individually, get ready to pay up.
And there are more issues complicating next year’s filing season. Forbes reports:
Internal Revenue Service Commissioner John Koskinen warned that close to half the people trying to reach the IRS by phone might not get through during the upcoming 2015 tax filing season… What’s to blame? Budget woes…
There are five key factors at play – complicating the upcoming filing season (that’s when you file your 2014 tax return). The IRS agency budget is the number one challenge, Koskinen said. The House has voted to cut the IRS budget for 2015 by $341 million, and the Senate has proposed to increase it by $240 million—that would still be 7% below 2010 funding levels.
In the meantime, Congress keeps passing laws that the IRS has to implement, namely the Affordable Care Act (“ACA”) and the Foreign Account Tax Compliance Act (“FATCA”). For example, Koskinen said the IRS requested $430 million in 2014 from Congress to implement the ACA but got zero, forcing it to take money out of enforcement and taxpayer services budgets.
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Then there are the tax extenders, 50-plus laws whose fate is uncertain. Congress has vowed to vote on the future of these laws in the upcoming lame duck session. But Koskinen warns that if the uncertainty continues into December, it could delay the start of the filing season and delay tax refunds.
Another factor Koskinen ticked off complicating this year’s filing season will be that the IRS is implementing a voluntary oversight program for return preparers. He said he’s still pushing for a mandatory oversight program…
While the IRS is heartened that this is just a bumpy patch along the road to ease and efficiency with tax filing, as taxpayer we should be less heartened.
Why should be taxed for not carrying healthcare? The personal and employer mandates are fundamentally unfair foundations of the un-Affordable Care Act. Without everyone sharing in the pain of a costly system, few would not get to benefit from it. Carrying healthcare coverage is responsible, but why should we all suffer the loss of personal freedom and choice. And young people are disproportionately penalized by ObamaCare. This is a system that forces young, healthy Americans to pay more to offset costs of older sicker Americans. On top of that, taxpayers are footing the bill for Americans who can’t afford their ObamaCare plans. Shouldn’t the Affordable Care Act be affordable to begin with?
No one looks forward to tax season – unless you’re receiving a refund. By the way, a refund is not getting free money from Uncle Sam, he’s just giving us back what he owes us for taking too much in the first place. Happy Tax Season!