Tax questions

[Pman]

So, I have a tax question and figured just maybe others might also AND just maybe someone would know the answers.

Here's mine:

I already know I meet the requirements to claim my son as a dependent under the relatives part. I am however confused about the insurance thing as far as it asking me if we were all insured (or else you have to pay the fine).
He didn't work so no income which means he is exempt from having to have the insurance. The question asks if we were all insured (and not individually) and if I say no it charges all 3 of us for not having it.
So in a nutshell he doesn't have insurance but also isn't required to have it so the only thing that makes sense to me is to say we have insurance and claim him. Can't figure out if I'm telling the truth or not lol.
It's not a huge deal whether I claim him or not but if I do I save $600 So why not if I legally can.

 

[lasersbee]

I'm in Canada... Sorry I don't know the
US Tax laws...:beer:
I'm sure someone on the Forum that has
kids should know.

Jerry

 

[Pman]

I use Taxact. In no way shape or form am I trying to get out of ANY taxes I may owe and it wasn't my intention to make it sound like that. I KNOW for a FACT he didn't have any health insurance and could care less about anyone knowing this I was hoping someone might know the answer as it makes sense that if you don't have to pay for health insurance then the question is moot for him and as far as I can tell so far I wasn't required to pay for it. It just doesn't make sense that the question is an all or none kind of thing. I would prefer not to pay $600 more than I'm required to though. IF I can't figure it out 100% I'll just not claim him as a dependant and be done with it.
Could it be just Taxact has it asked that way but if you used someone else or had the paperwork it's different?
I should look at the form instructions online and see if it looks the same. Haven't paid Taxact for anything yet.
I'm pretty sure you can actually call the IRS and ask questions but what I saw online is the hold time can be long.

 

[Encap]

I use Taxact. In no way shape or form am I trying to get out of ANY taxes I may owe and it wasn't my intention to make it sound like that. I was hoping someone might know the answer as it makes sense that if you don't have to pay for health insurance then the question is moot for him and as far as I can tell so far I wasn't required to pay for it. It just doesn't make sense that the question is an all or none kind of thing. Could it be just Taxact has it asked that way but if you used someone else or had the paperwork it's different?
I should look at the form instructions online and see if it looks the same. Haven't paid Taxact for anything yet.
I'm pretty sure you can actually call the IRS and ask questions but what I saw online is the hold time can be long.

You should call IRS to make sure of what you do--best idea

 

[paul1598419]

I know that for dependents the forms usually consider them to be minors and so would be covered under a family plan like I had while my daughter was under age. She is now in her mid thirties and hasn't been on my insurance for a long time. I'm not sure what the basis is for adult family members becoming your dependent, but there must be a way to claim him legally, but not need to have him insured. I have found that the IRS is not the best place to get answers as they are often wrong and that can't be used by you as a defense.

 

[Encap]

Look here: https://www.irs.gov/pub/irs-pdf/p503.pdf

and
https://www.irs.gov/faqs/filing-requirements-status-dependents-exemptions/dependents-exemptions/dependents-exemptions-2

and here: https://www.irs.gov/publications/p501#en_US_2017_publink1000220886

Beyond that call IRS and ask---they know better than LPF their own rules and regulations

 

[Pman]

I know I can't get any credit like the child tax stuff. I haven't claimed him in years as a dependent but he has lived with us the entire 2017 this time.

As I mentioned he does meet the qualifying relative test.

I've gone through those exact forms and information Encap but thanks for spending time on it for me

I think I'm going to have to call them and yeah I know you can't hold them to what they say. They may be able to tell me what form I need to fill out although there are some things they don't require you to actually send them.
I use Taxact because I've been using them for a long time and they import my past stuff in but I was tempted to switch to TurboTax as I think there's a much greater chance at real human tech support. Taxact isn't what it used to be. My understanding is they sold out to someone else and the support has been really bad now.
Like I said, I will NOT risk making an error so if I can't get a definitive answer I'll not include him in our taxes.

 

[steve001]

So, I have a tax question and figured just maybe others might also AND just maybe someone would know the answers.

Here's mine:

I already know I meet the requirements to claim my son as a dependent under the relatives part. I am however confused about the insurance thing as far as it asking me if we were all insured (or else you have to pay the fine).
He didn't work so no income which means he is exempt from having to have the insurance. The question asks if we were all insured (and not individually) and if I say no it charges all 3 of us for not having it.
So in a nutshell he doesn't have insurance but also isn't required to have it so the only thing that makes sense to me is to say we have insurance and claim him. Can't figure out if I'm telling the truth or not lol.
It's not a huge deal whether I claim him or not but if I do I save $600 So why not if I legally can.

Don't claim him as a dependent. An answer to your question.
https://ttlc.intuit.com/questions/3281909

Your son if 26 or older he should be on Medicaid if your state expanded the Medicaid program. With no income he qualifies be on Medicaid.
Are you certain all three of you will be penalized? Meaning each of you will be fined? Double check it.
What tax preparation are you using? I use the Free File Fillable forms provided by the IRS on that site. It does all calculations... like say Turbo Tax and others do and the best thing is it's free.

This may be helpful. https://www.healthcare.gov/health-coverage-exemptions/hardship-exemptions/

 

[Cyparagon]

Straight from the 1040 instructions:

"For each month of 2017, you must either:
Have qualifying health care coverage
for yourself, your spouse (if filing
jointly), and anyone you can or do claim
as a dependent (you are treated as having
coverage for any month in which
you have coverage for at least 1 day of
the month),
Qualify for an exemption from the
requirement to have health care coverage,
or
Make a shared responsibility payment
with your return and enter the
amount on this line.

...

If you can’t check the box on this
line, you must generally either claim a
coverage exemption on Form 8965 or
report a shared responsibility payment
on line 61 for each month that you, your
spouse (if filing jointly), or someone
you can or do claim as a dependent
didn’t have coverage. See the Instructions
for Form 8965 for information on
coverage exemptions and figuring the
shared responsibility payment.
"

In other words, you's in trubl.

 

[steve001]

Straight from the 1040 instructions:

"For each month of 2017, you must either:
Have qualifying health care coverage
for yourself, your spouse (if filing
jointly), and anyone you can or do claim
as a dependent (you are treated as having
coverage for any month in which
you have coverage for at least 1 day of
the month),
Qualify for an exemption from the
requirement to have health care coverage,
or
Make a shared responsibility payment
with your return and enter the
amount on this line.

...

If you can’t check the box on this
line, you must generally either claim a
coverage exemption on Form 8965 or
report a shared responsibility payment
on line 61 for each month that you, your
spouse (if filing jointly), or someone
you can or do claim as a dependent
didn’t have coverage. See the Instructions
for Form 8965 for information on
coverage exemptions and figuring the
shared responsibility payment.
"

In other words, you's in trubl.

Uh Oh!

 

[Bacon]

Sorry for trouble; taxes suck big-time! :gun: This is kinda off-topic, but one time I royally screwed up my taxes and accidentally paid an additional couple thousand dollars (I was drunk and it was the last day to file; going though some changes). I realized my error and immediately sent corrections.
Next year I got my money back plus $200 in interest! Not quite as good as investing in stocks, but I was surprised the IRS paid me interest instead of punishing me for my error!

 

[paul1598419]

I've been filing taxes for 47 years and I have never heard of the IRS penalizing anyone for over payment. They are always pretty good about even returning money after three years.

 

[Andrew124C41]

Before reading the following post, I would strongly suggest you play the following in the background while you continue reading: Im the taxman....

So, am a hundred grand in educational debt after medical school and residency. It's the nineties and managed care is giving patients nothing and paying me less nurses earn. Kids are making a killing in IT. I am barely breaking even working two jobs....nine to five at a family practice/urgent care....then from around sic to eleven or midnight in another practice....with the debt and double-digit interest....I am barely making it.

Don't get me wrong...I love medicine and did not get into it for the money....however, I never knew that with the shifting sands of healthcare, I would actually have a hard time making ends meet because of debt service.

I decide to work in an underserved area in a small town in TN. Two and a half years service and they would give me something like 50 K for loan repayment. Hospital would give me a practice guarantee which is like a loan but does not necessarily have to be repaid.

I get there and find out the hospital is going bankrupt....they should never have brought me in because patients were actually getting care in the nearest largest city...Nashville.

Someone takes over the hospital and honors my contract...but the doc I replaced was a retired family doc who did a lot of surgery which generated a lot of money for the hospital and for the doc. For historical reasons beyond the scope of my story, procedural medicine pays more than cognitive medicine.....spend an hour with a complicated elderly patient medicare after overhead...pays you 45 bucks......spend one half hour sticking a tube up your butt...I find a couple of polyps....I might make four to five hundred bucks for a half hours work.

Bottom line is that I really got screwed. If I left, I would owe even more money....I had been hustled.

When my contract was finished, I was in more debt than when I got there.

My accountant mistakenly considered my practice guarantee as income rather than a loan. So off went a huge check to uncle sam. Meanwhile, the hospital sent me a collection notice for the practice guarantee.

I was leveraged into personal bankruptcy.

I had also developed chronic fatigue syndrome....another long story.

Because of a change in the law, my med school loans were not dischargeable unless I could prove undue hardship.

So, now I am not only bankrupt but I am going up against uncle sam on two fronts...the first to prove that my illness was an undue hardship and that the practice guarantee was a loan and not income.

Uncle Sam did not want a precedent set. They sent a US attorney from Washington, DC, another one from Pitsburg, as well as the one from the US court in which the case was being heard.

Despite the fact that I the hospital had sent me paperwork proving they had given me a loan, the court held against me...the loan for which the hospital had won a judgment against me....according to the judge...was not a loan!

Despite all the evidence presented...the Judge ruled that I could make more money, even with chronic fatigue....(He did not show me where or offer me a job....he just ruled that I was able to make more money...whether I could or not was irrelevant.

The bankruptcy went through....but I still owed some of the federal medical school loans....years went by and the government finally forgave the loans....but in so doing, our friends at IRS came knocking....it never ends.....
a nice person at the IRS offer in compromise department let me off with a grand....rather than something like 15 grand.

I ask myself...why am I still a patriot lol

As for the taxes Pman....the Affordable Health Care Act is not so affordable afterall.....leave it to the government to screw you....when they tell you they are here to help you....lend a hand....they are....putting both of their hands in both of your pockets.

I think everyone's advice was on the money. He should be eligible for medicaid although their might be a catch 22....that he lives with you and your claiming him as your dependant.....the total family income is what counts....you and your wife....added to his zero income....yep...pretty crazy. He has to purchase insurance....in theory, that is....

You need to check with the state agency that handles medicaid and they will help you.

Also, these days you are very likely to actually get real, compassionate advice from the IRS....sounds crazy I know....the new deal is that their vitriol is saved for the wealthy individual or corporate tax cheat....not for the struggling average tax payer.