Healthcare has seen many changes over the decades - none more significant than the Affordable Care Act (ACA). Unfortunately, the ACA hasn’t gone off without a hitch, least of all for small business owners.
Since its creation, new tax penalties have been brought into action by the ACA in an effort to enforce compliance. However, these penalties are still largely unknown and greatly misunderstood, even by small business tax advisors. This poses a serious problem for small business owners seeking to be compliant with new laws when they file their 2014/2015 federal income tax returns. Even more unfortunately, several insurance firms are even taking advantage of the situation, marketing non-compliant solutions and products through online media, resulting in more unnecessary penalties for small business owners.
Why are there so many penalties during this transition?
While it’s a safe conclusion that the Department of Labor and the Internal Revenue Service have failed to effectively communicate the details of new ACA laws, the IRS believes that enforcing tax penalties is the best way to increase communication and compliance.
While the tax penalties are generally severe for compliance failure, the law contains provisions for small businesses that do so unintentionally. The first tax penalties will be addressed in spring 2015 as business owners begin to file their 2014 returns.
Among the most common compliance errors are:
Fortunately, small business compliance is as simple as following a checklist. Download the ACA Compliance Checklist and use it as you file your return. As long as you can check off each item, you should be penalty free in 2015.
More questions about ACA compliance? Contact Bill Schock at email@example.com, and find out how your small business can be compliant in 2015.