The Affordable Care Act, also known as “Obamacare,” went into effect last year. You likely know that this means you were required to have health insurance in 2015, or else face tax penalties. But did you know that it also means you’ll have some more paperwork to keep track of this year? To ensure that businesses are offering health insurance and that individuals are adequately insured, there are two new pieces of paperwork that you will need to file your taxes this year—the 1095-B and 1095-C.
There are a lot of technicalities surrounding whether you will get the 1095-B, 1095-C, or both of these forms, but we won’t delve into that here. That’s a job for your CPA. We want to give you some basic information about how these forms will affect you both as an individual and as a business owner.
Individuals
Like we said, you could be getting two new forms that you weren’t expecting this year. These papers are essential for proving to the IRS that you were insured during 2015. If you don’t have them, then you could be looking at steep fines. This means that you need to be able to keep track of these documents in addition to all of your other tax documents, and that you need to be retaining them for several years in case of an audit.
Additionally, these two forms could possibly be sent to you from two different sources—your employer and your healthcare provider. Juggling information coming in from different places can be difficult if you don’t have a good system in place, so make sure you establish a good document management system now to ensure you have everything accessible when you’re ready to file your tax return.
Businesses
Depending on the size of your business, you may be required to send either of the above forms or a combination of the two to all of your employees. Plus, you’ll need to send the 1095-C to the IRS, showing them that you offered adequate medical coverage for your employees. Just imagine the paperwork involved with that!
With all of the other paperwork you already have to send out during tax season, your HR department will have their plates full. You can minimize the amount of work involved with all of these documents by implementing an effective document management system. This should include paperless copies of any tax documents sent to employees so that you can quickly access them if a new copy is needed; you should also utilize an automated workflow function so that you can ensure all documents are sent out by the appropriate deadlines.
We understand just how much work these two new tax forms can create for you and for your business. If you need a little help managing the extra workload, just fill out the form on this page. One of our experts will contact you and give you a free demonstration of how eFileCabinet can help you manage your tax documents and much more.