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Money Saving Tip

ACA Tax Credit Means IRS Form 8962!

If you received a tax credit or subsidy under the Affordable Care Act on your individual health policy we want to remind you that you were required to file IRS Form 8962 with your 2014 Federal Income Taxes.  The Advanced Premium Tax Credit (APTC) or income-based cost sharing reduction (CSR) transfers a portion of the monthly premium for some individual health insurance policies from the policy owner to the Federal government as part of the Affordable Care Act which is known to some as Obamacare.

We strongly encourage you to reach out to your tax professional if you believe that you received APTC or CSR cost reductions to confirm that they properly filed your IRS Form 8962.

Note:

  • If your Form 8962 was properly filed with your 2014 income taxes then you don’t need to do anything.
  • If you have not filed your taxes with Form 8962 then take action immediately (i.e., electronically file your 2014 return and Form 8962).

If you have questions on this requirement you can call your tax professional or contact the IRS directly at www.irs.gov/aca or 1.800.829.0922.

High Interest Rates Where?

This morning I opened a statement on one of my daughter’s life insurance policies and was pleased to see that the cash value portion of her life insurance policy is still paying 4.2% interest…not a high interest rate in normal times but it’s astronomical in today’s market.

While we don’t sell Life Insurance as a financial investment, these financial times are unusual and if you have an existing policy with ‘high’ guarantee interest rates you might consider parking some money in your life insurance for now.  Many permanent, cash value policies can have additional money added to their interest earning cash values at any time.

Also, don’t forget that the internal rate of return in a life insurance policy is usually tax free growth which means that my measly 4.2% is the equivalent of 6.27% in a taxable investment (Tax Equavelent Yield assuming a 33% marginal tax rate  [4.2%/(1-.33)=6.27%]).

Call your Yennie & Jones agent at 816-540-2114 if you have additional questions on this little known feature of many life insurance policies.

 

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