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Started taxes, got stuck

February 3rd, 2015 at 05:12 am

I've been doing my taxes by myself for years, after getting tired of paying my accountant $300 or so for what I felt was a fairly simple return. He had me collect all my paperwork in an orderly little folder anyway, so I figured I could model successive tax returns on ones he'd done before, consulting with the IRS 1040 instruction booklet as needed.

Being self-employed created the need for several more schedules/forms; it was always such a hassle and of course I worried something in there might trigger an audit. So I happily decided not to do any more freelance work in 2014 now that I'm working f/t at the bank.

I relished the thought of simplifying my tax return, which I did. So Sunday I was making steady progress getting through the return, filling out all the little worksheets and schedules for itemized deductions and luckily i didn't sell any shares of my sole remaining taxable mutual fund so I didn't have to deal with capital gains or losses.

But then I got to a new line item, and a new form, for people who got a subsidy via the healthcare exchange. What I didn't realize initially is that I needed a new form, the 1095-A, to complete the new Form 8962. The IRS instructions weren't exactly crystal clear, considering this is all brand new, but it appeared that my healthcare exchange is supposed to mail me the 8962. I called them up and they confirmed I should get it and that they were a little behind schedule due to the recent snow storms.

So that will delay completion of my return, but I already knew that I'd have to pay back the $1200 in subsidies I got for the 3 months I was getting healthcare through the exchange. But I also could tell that I overpaid my federal taxes via both the agency that hired me for the contract job and the bank I work for as a perm employee to the extent that I should not owe ANYTHING to the IRS and in fact may still get a refund of about $500!

So that's good news, although I will want to adjust/increase my withholdings somewhat so not so much tax is withheld. I wish I knew of a more precise way to do that; it always seems like something of a guessing game, but right now, I have just 2 withholdings, I believe. I guess I should just increase that to 3 and see what happens?

5 Responses to “Started taxes, got stuck”

  1. doingitallwrong Says:

    The IRS withholding tables tell you how much is withheld per allowance. For example, a married person paid biweekly whose taxable wages per check are $1500 would have $141 withheld for 0, $118 for 1, $95 for 2, and $72 for 3. The tables are in IRS Publication 15:

    http://www.irs.gov/pub/irs-pdf/p15.pdf

    Most employers use the tables, but there are a couple of other methods which area also discussed in the publication. (It all starts on page 43.)

  2. PatientSaver Says:

    Thank you!

  3. FrugalTexan75 Says:

    Since I didn't have insurance for 4 months in 2014, I had to pay a "fee" of $35.

    Hope you get your last form soon!

  4. S103462 Says:

    Actually, the healthcare exchange will send you Form 1095-A (Health Insurance Marketplace Statement). You'll be responsible for transferring relevant information from that 1095-A form to Form 8962 (Premium Tax Credit), which is the form that you'll send in with your tax return. It's really easy to do (despite what you hear in the media) -- we've already done it. (By the way, we were able to download our 1095-A from our healthcare exchange online account.)

  5. PatientSaver Says:

    Yes, I did speak to my healthcare exchange and they unfortunately don't offer it online, which would have been great. Well, I know who to go to if I have any trouble filling out the 8962!

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