Now that tax season is underway, it’s time to double-check your forms and make sure that your information is as accurate as possible before you file. But what if the wrong information you use to file your taxes is someone else’s fault?
This is what happened to tens of thousands of tax filers this season. Recently, the government announced that about 800,000 1095-A forms were mailed out with wrong information. Corrected forms should be available very soon (if they haven’t been shipped out already), and the government is asking that you wait to file your tax return until you receive a corrected form, if applicable.
Do You Owe More in Taxes?
One of the issues related to the Patient Protection and Affordable Care Act (PPACA, also called Obamacare) is that there are some tax implications related to subsidies. We’ve already seen how the method for determining your income for possible subsidies could mean inaccurate estimates and lead to a higher tax bill for this year. Now, though, another snag has appeared. Wrong information on the Form 1095-A mailed to you might mean that you owe more in taxes.
If you received an inaccurate Form 1095-A, there is a good chance you have already been notified, and that a corrected form is on the way. If this is the case, you need to sit tight and wait to file your taxes — and prepare yourself for the reality that you might have a bigger bill than you bargained for.
Early Filers Get a Break
However, if you were fast enough to fill out your taxes and file them early on, you might get a break from the increased taxes. The IRS estimates that about 50,000 taxpayers who received the wrong 1095-A form filed early, before the mistake was discovered. If you are among those, you won’t need to pay additional taxes, even if you would normally owe.
That doesn’t mean that you can hurry and file now, though, and expected to see a break. The government is only allowing those who filed before the error became public knowledge to get the break. If you haven’t filed, you are supposed to wait for the corrected form and then file then.
It might make sense to double-check when the correct form arrives, though. Even if you have filed already, it might be that the error meant that you paid more than you owed. Compare your forms, and determined whether or not you would have been better off if you had waited. If you should have had a smaller bill, but overpaid because of the mistake, it might be worth it to amend your tax return.
You should have an account on HealthCare.gov if you have been receiving a subsidy. Log in to your account if you want more information about whether or not you have been affected, and to help you figure out what to do next. And, of course, if you still aren’t sure how to proceed, you should consult with a knowledgeable tax professional.