Question for those who do your own taxes - additional effort due to ACA?

[Alenzia]

I have a question for the people who do their own taxes - how much more effort are you needing to put in due to the ACA requirements? We don't do our own taxes yet (I know, facepunch, we'll get there after we tackle bigger things). Our accountant recently sent out a letter to all her clients stating that the ACA requirements mean an additional 1-3 hours of work for her, so she'll be charging more, etc. Is that pretty close to the ballpark of what people have been seeing, or way off?

[Timmmy]

We are planning an average of an additional one hour per client in our firm.  A large majority will be very simple and will take little to no extra time.  Some are going to get out of control obnoxious and take several additional hours to do. 

For us, it's as much about the time it takes to talk to people about it as it is about the time to do the actual work. 

If you have employee sponsored health coverage for everyone on the return, it's as simple as checking one box. 

[Gin1984]

Lol, it took no extra work for us (my husband and I) because we were covered by employer insurance.  My mother is covered by non-employer plan and planning for that took a bit extra but that is it.  I'd be a new accountant and having the last seven years reviewed by the new one.

[Alenzia]

Thanks for the clarification, Timmmy! We do have employer sponsored health coverage, so I guess we should be on the low end of her estimate. I was mostly surprised by the 3 hours on the high end, but the letter was a generic one, so I guess she was trying to cover her bases.

[Timmmy]

Thanks for the clarification, Timmmy! We do have employer sponsored health coverage, so I guess we should be on the low end of her estimate. I was mostly surprised by the 3 hours on the high end, but the letter was a generic one, so I guess she was trying to cover her bases.

Your situation should have absolutely no additional cost.  It literally is one check box in our software and it's done. 

We sent out basically the same verbiage to our clients and we wouldn't charge you anything extra. 

[hdatontodo]

Right per below poster.

In TurboxTax you indicate you were insured by your employer for the full year and move on to the normal stuff. Estimated time, 30 seconds.

[mskyle]

That seems ridiculous. Do you have a complicated financial situation? Because it takes me an hour or two to do my taxes, period. And I live in Massachusetts where the health insurance reporting requirement is actually a bit more strict (have to put in a couple of numbers in addition to checking a box). Try TurboTax!

I think this is probably a case of your accountant wanting to change rates and picking something random to blame it on.

[MDM]

That seems ridiculous. Do you have a complicated financial situation? Because it takes me an hour or two to do my taxes, period. And I live in Massachusetts where the health insurance reporting requirement is actually a bit more strict (have to put in a couple of numbers in addition to checking a box). Try TurboTax!

I think this is probably a case of your accountant wanting to change rates and picking something random to blame it on.

The horse may already be dead but the comment above - and all the others - should be telling you "it's time to fire the CPA and do it ourselves."  Unless your situation really is extraordinarily complicated...?

[Abe]

Unless you own a business, personal taxes are generally not that complicated with tax software. I do my entire family's taxes in about 3-4 hours, including rental income.

[Norioch]

I'm going to have to check one additional box. Thanks, Obama!

[Alenzia]

I think this is probably a case of your accountant wanting to change rates and picking something random to blame it on.

That's what it kind of felt like... I think we'll have to start doing our own taxes sooner rather than later. Our tax situation isn't super complicated - 3 regular jobs between the two of us, investments, one rental, education credits. Just need to take the plunge already.

[Timmmy]

That seems ridiculous. Do you have a complicated financial situation? Because it takes me an hour or two to do my taxes, period. And I live in Massachusetts where the health insurance reporting requirement is actually a bit more strict (have to put in a couple of numbers in addition to checking a box). Try TurboTax!

I think this is probably a case of your accountant wanting to change rates and picking something random to blame it on.

To be fair to the accountant in question, the ACA is costing us a measurable amount of time on a substantial number of returns.  Since we don't know the health insurance situation for most of the clients it's a great unknown.  Our office will do about 1,000 returns this year and if it averages to a half hour per return that's an additional full time employee for all of tax season. 

[Matthew]

I just filed our taxes last week.  I've been doing our own for about 10 years, and it seems faster and easier every year, even as our situation becomes more complex.  It's just pretty basic math and research skills that are required.

The ACA portion of our return took approximately 1.5 minutes.  Our kids are insured through a state program, my wife and I were insured for part of the year through my employer, and I'm a student, so it wasn't the simplest possible scenario.  But it was still easy.  I think that highlights one advantage of doing our own taxes.  Since these sorts of details are so readily available to me (in my head), I don't need to spend time trying to communicate them to someone else.

[netskyblue]

Turbotax - we had to click a box for which months of the year DH was covered by insurance, and enter the monthly premium.  Right off a piece of paper that was mailed to him, no harder than entering info from a W2.

[merula]

I'm going to have to check one additional box. Thanks, Obama!

+1

I used the IRS's free fillable forms. If you were insured the whole year, it was one check box there, too.

[Emilyngh]

That seems ridiculous. Do you have a complicated financial situation? Because it takes me an hour or two to do my taxes, period. And I live in Massachusetts where the health insurance reporting requirement is actually a bit more strict (have to put in a couple of numbers in addition to checking a box). Try TurboTax!

I think this is probably a case of your accountant wanting to change rates and picking something random to blame it on.

To be fair to the accountant in question, the ACA is costing us a measurable amount of time on a substantial number of returns.  Since we don't know the health insurance situation for most of the clients it's a great unknown.  Our office will do about 1,000 returns this year and if it averages to a half hour per return that's an additional full time employee for all of tax season.

Really?   I've done taxes through VITA for a variety of people with a variety of situations under the ACA (full employee insurance, insurance for part of the year, no insurance, marketplace insurance, exemptions for the insurance, etc) and not even the longest has taken me anything close to an additional half an hour, let alone 1-3 hours...*maybe* fifteen minutes.   Taking all of the extra time the ACA requires into account, on average, the ACA portion takes me less than 5 minutes, and if one has employee sponsored health insurance, it takes me 30 seconds.   

Really, from my experience the excuse of ACA requiring so much time/cost sounds like a bullshit excuse to raise costs.   Just another reason I'm glad I do our own taxes.

[Timmmy]

That seems ridiculous. Do you have a complicated financial situation? Because it takes me an hour or two to do my taxes, period. And I live in Massachusetts where the health insurance reporting requirement is actually a bit more strict (have to put in a couple of numbers in addition to checking a box). Try TurboTax!

I think this is probably a case of your accountant wanting to change rates and picking something random to blame it on.

To be fair to the accountant in question, the ACA is costing us a measurable amount of time on a substantial number of returns.  Since we don't know the health insurance situation for most of the clients it's a great unknown.  Our office will do about 1,000 returns this year and if it averages to a half hour per return that's an additional full time employee for all of tax season.

Really?   I've done taxes through VITA for a variety of people with a variety of situations under the ACA (full employee insurance, insurance for part of the year, no insurance, marketplace insurance, exemptions for the insurance, etc) and not even the longest has taken me anything close to an additional half an hour, let alone 1-3 hours...*maybe* fifteen minutes.   Taking all of the extra time the ACA requires into account, on average, the ACA portion takes me less than 5 minutes, and if one has employee sponsored health insurance, it takes me 30 seconds.   

Really, from my experience the excuse of ACA requiring so much time/cost sounds like a bullshit excuse to raise costs.   Just another reason I'm glad I do our own taxes.

In a VITA role with relatively simple returns, you're right, it's not complicated.  If our practice was built on VITA type returns we would be flat broke, I can't charge anything for that simple of a return. 

Yes it really does take additional time.  Yes the additional costs have to be recouped. 

[Emilyngh]

That seems ridiculous. Do you have a complicated financial situation? Because it takes me an hour or two to do my taxes, period. And I live in Massachusetts where the health insurance reporting requirement is actually a bit more strict (have to put in a couple of numbers in addition to checking a box). Try TurboTax!

I think this is probably a case of your accountant wanting to change rates and picking something random to blame it on.

To be fair to the accountant in question, the ACA is costing us a measurable amount of time on a substantial number of returns.  Since we don't know the health insurance situation for most of the clients it's a great unknown.  Our office will do about 1,000 returns this year and if it averages to a half hour per return that's an additional full time employee for all of tax season.

Really?   I've done taxes through VITA for a variety of people with a variety of situations under the ACA (full employee insurance, insurance for part of the year, no insurance, marketplace insurance, exemptions for the insurance, etc) and not even the longest has taken me anything close to an additional half an hour, let alone 1-3 hours...*maybe* fifteen minutes.   Taking all of the extra time the ACA requires into account, on average, the ACA portion takes me less than 5 minutes, and if one has employee sponsored health insurance, it takes me 30 seconds.   

Really, from my experience the excuse of ACA requiring so much time/cost sounds like a bullshit excuse to raise costs.   Just another reason I'm glad I do our own taxes.

In a VITA role with relatively simple returns, you're right, it's not complicated.  If our practice was built on VITA type returns we would be flat broke, I can't charge anything for that simple of a return. 

Yes it really does take additional time.  Yes the additional costs have to be recouped.

What situation regarding the ACA could arise that's more complicated than those I described?    What options are there beyond someone having health insurance, not having insurance, having insurance for part of the year, having an exemption, or having marketplace insurance?   Even if there are returns that are more complicated in other manners, how would these complications affect the time it takes to do the additional ACA portion?

[Emilyngh]

... I can't charge anything for that simple of a return. 
 

Also, I find this statement highly questionable.   While there're certainly more complicated returns that VITA can't do, as long as the individual is low enough income, VITA can and does do returns with the following:

Form 1040EZ, 1040A, 1040
Schedules A, B, D, C-EZ, EIC, R, SE
Form 1040 – V
Form 1040 – SE
Form 2441 (child and dependent care credit)
Form 8863 (education credits)
Form 8880 (credit for qualified retirement savings contributions)
Form 8812 (additional child tax credit)
Form 8888 (allocation of refund)
Form 8917

I find it highly unlikely that you'd do the taxes for someone with all (or several) of the above and not charge for it.   If it's true, you are truly unusual, considering that the average preparer charges over $250 for just a 1040 with a Schedule A and state taxes.

"Recently, the National Society of Accountants (NSA) conducted a survey which showed that the average cost of professional tax preparation is $261. This is price that most tax preparers will charge for a 1040 Tax Form with itemized deductions (Schedule A) plus a state tax return."
http://www.irs.com/articles/tax-preparation-costs-and-fees

[Timmmy]

... I can't charge anything for that simple of a return. 
 

Also, I find this statement highly questionable.   While there're certainly more complicated returns that VITA can't do, as long as the individual is low enough income, VITA can and does do returns with the following:

Form 1040EZ, 1040A, 1040
Schedules A, B, D, C-EZ, EIC, R, SE
Form 1040 – V
Form 1040 – SE
Form 2441 (child and dependent care credit)
Form 8863 (education credits)
Form 8880 (credit for qualified retirement savings contributions)
Form 8812 (additional child tax credit)
Form 8888 (allocation of refund)
Form 8917

I find it highly unlikely that you'd do the taxes for someone with all (or several) of the above and not charge for it.   If it's true, you are truly unusual, considering that the average preparer charges over $250 for just a 1040 with a Schedule A and state taxes.

"Recently, the National Society of Accountants (NSA) conducted a survey which showed that the average cost of professional tax preparation is $261. This is price that most tax preparers will charge for a 1040 Tax Form with itemized deductions (Schedule A) plus a state tax return."
http://www.irs.com/articles/tax-preparation-costs-and-fees

Maybe I should restate...  I can't charge enough to make those returns worth my time. 

Besides, anyone who is VITA eligible should probably be doing their own return. 

The complicated parts of tax strategy isn't filling out the forms.  That's the quick and easy part at the end.  Most of our clients are business owners with very complex tax strategies that span across multiple businesses and different tax returns.  The ACA is yet another variable that needs to considered.  Filing status(MFJ or MFS), dependency of minor children and the potential tax credits related to them, future income levels to qualify for the PTC, the type of the income coming from businesses and who it's paid to.  That's a start but certainly not everything. 

[cpa cat]

If you're covered by your employer, then 30 additional seconds to ask you if everyone in your family was covered and then another 1 second to check the checkbox in the software.

If you used an exchange and are not eligible for a subsidy - 30 additional seconds to ask you if everyone in your family was covered and then another 1 second to check the box.

If you received a subsidy or didn't but are eligible, or you didn't have health insurance - maybe an hour to start. I would expect that to decline to 15-30 minutes by the end of tax season.

Now, if you're a business who is trying to be ACA compliant as an employer - 1-3 hours.

[milla]

Sounds like bullshit. We had two different plans both purchased through the marketplace (life change) and it literally took five minutes to enter the info in the very clearly outlined spot on TaxAct. I even had two forms! Oh no! The Humanity!!