Great news--perhaps the IRS really does care!!
While the Maryland legislature still has work to do to fix the “free vasectomies” insurance mandate for future years so as to not disqualify Health Savings Accounts-qualified High Deductible Health Plans, the IRS has granted retroactive relief for 2018 and for 2019 as well if needed. So employees and individuals can once again make pre-tax contributions to their HSAs for 2018 and contributions made earlier this year will not be subjected to penalties. Note—You must still have an otherwise HSA-qualified HDHP and the vasectomy clause must be the only reason for HSA disqualification. Following is an excerpt from the IRS.
The Treasury Department and the IRS are aware that certain states require benefits for male sterilization or male contraceptives to be provided without a deductible, and that individuals have enrolled in health insurance policies and other arrangements that otherwise would qualify as HDHPs with the understanding that coverage for male sterilization or male contraceptives without a deductible did not disqualify the policies or arrangements from being HDHPs. The Treasury Department and IRS also understand that certain states may wish to change their laws that require benefits for male sterilization or male contraceptives to be provided without a deductible in response to this notice, but may be unable to do so in 2018 because of limitations on their legislative calendars or for other reasons. Until these states are able to change their laws, residents of these states may be unable to purchase health insurance coverage that qualifies as an HDHP and would be unable to deduct contributions to an HSA.
Accordingly, this notice provides transition relief for periods before 2020 (including periods before the issuance of this notice), to individuals who are, have been, or become participants in or beneficiaries of a health insurance policy or arrangement that provides benefits for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for an HDHP. For these periods, an individual will not be treated as failing to qualify as an eligible individual under section 223(c)(1) merely because the individual is covered by a health insurance policy or arrangement that fails to qualify as an HDHP under section 223(c)(2) solely because it provides (or provided) coverage for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for an HDHP.
Should you have any questions, Reumont CPA is here to help.
If you have an ownership interest in or signature or other authority over a financial account located outside the US (aka, an “off-shore account”) with aggregate balances of $10K or more-- listen up! Effective in 2017, the Treasury Department has accelerated the date for filing FinCEN Form 114 (from June 30) to April 15th in order to align the FBAR with the filing deadline for individual income tax returns. Again, you do not want to miss this deadline. The penalties are (1) if non-willful, up to $10,000 or (2) if willful, up to the greater of $100,000 or 50% of the account balance; criminal penalties may also apply. The good news is that you can request an extension to October 15th if necessary—but make sure you do so by April 15th!
Note: Despite the alignment of due dates, the FinCEN Form 114 is not attached to your Form 1040 individual income tax return. Instead, it must be filed electronically at http://bsaefiling.fincen.treas.gov. However, don’t forget to consider income generated by your off-shore accounts. This may be taxable on your Form 1040. US citizens and residents are responsible for reporting their worldwide income on their tax returns, whether FinCEN 114 reporting is required or not.
And watch for personal FBAR filing requirements even when the money is not yours. For instance, if you own over 50% of the stock of a corporation that has foreign accounts or if you have signature authority over foreign accounts belonging to your employer, you may have a personal reporting requirement in addition to your corporation having a filing requirement.
And what does FBAR stand for? Glad you asked: Report of Foreign Bank and Financial Accounts
Early filers eligible for the Earned Income Credit (EITC) or Additional Child Tax Credit (ACTC) on their 2016 returns may experience a delay in receiving their refund. A high percentage of fraudulent returns are submitted during the early days of tax season. The IRS is implementing new measures to counteract this fraud. As a result, refunds for early filers with the EITC and/or ACTC will be held until 2/15/17. You can still file your returns early—just allow more time to received your anticipated refund if you are a very early filer. Normal processing time is expected for all but the very early filers.