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Dear Tax Professional:

Because the Affordable Care Act’s provisions affect most taxpayers, your clients and their friends and associates need your input and expertise now more than ever. It’s likely that many of your clients will have a different outcome next season than what they may be anticipating, so the sooner they know about these important changes, the better.

Right now, the ACA and its requirements provide you with the opportunity to reach out to your clients before the upcoming tax season to prepare them for fees and potential penalties they may not be expecting.

To assist you with this process, we have included two client letters for your use:

• A letter to your current clients, highlighting the top 10 surprises they could face during tax season because of Obamacare; and

• A letter to prospective clients, with an offer to receive this information if they contact you directly.

By using these letters, you’ll begin to prepare your clients for the new health care regulations, and potential clients will realize that they need someone with your expertise to help them navigate through the unexpected penalties the ACA has imposed.

As a subscriber to Spidell’s California Taxletter®, we are happy to provide you with these client letters, as well as other tools to assist you with your practice. Thank you for your business, and we look forward to working with you through another tax season!

Sincerely,

Renée Rodda, J.D.

Vice President, Spidell Publishing, Inc.®

Letter for prospective clients

Name

Address

City, ST ZIP

Date

Dear (PROSPECTIVE CLIENT),

Did you know that because of Obamacare, your tax returns will never be the same? Most people don’t, and they could end up paying huge penalties if their returns are not filed correctly.

My name is (YOUR NAME) and my tax practice has been in (CITY) for over 20 years. Because Obamacare represents a significant change in our country’s health care system and how health care is funded, we have made it our goal to know the law and how to apply it for both individuals and businesses.

That’s why we’re reaching out to you. We know the fees and penalties, and the complexities of these new requirements. We are committed to helping you avoid any unpleasant surprises when you prepare and file your tax returns. If you prepare your own tax returns, you should know that although tax software can handle some of the computations, the software cannot know complexities such as which miscellaneous itemized deductions can be applied when computing the new net investment income tax.

Our practice has compiled a list of ten surprises you could face during tax season because of Obamacare. If you would like to get a copy of this list, please e-mail us at (YOUR E-MAIL), and in the body of the e-mail, say: Please send me the list of Obamacare surprises. We’ll be happy to forward it to you immediately.

If you find this list useful and you have any questions, please give me a call at (YOUR PHONE NUMBER). I am available to answer any questions you may have.

Thank you for considering our firm for your tax planning needs.

Sincerely,

(YOUR NAME)

Letter for current clients

Name

Address

City, ST ZIP

Date

Dear (CLIENT),

Did you know that because of Obamacare, your tax returns will never be the same? Most people are still unaware of how Obamacare will affect them personally. In fact, the requirements for coverage and the penalties for noncoverage affect all of us, and as your tax professional, I want to ensure that you have a clear understanding of how these new fees are assessed so you’re not surprised by unexpected penalties.

Here’s a list of the ten surprises you could face during tax season because of Obamacare:

1. The Affordable Care Act mandates – and you must report – that you have health care coverage by 2014 or pay a penalty.

2. Your spouse and dependents must also be covered. If not, you may be subject to a penalty. However, there are 33 separate exemptions from the penalty.

3. Your plan must be a “qualified health plan” that meets the standards set by the government.

4. If you received a subsidy or credit on your insurance premium, you must match the advanced credit to the actual credit based on your actual income to determine whether any of the advanced credit must be repaid or whether you are entitled to additional credits.

5. Income for purposes of the final insurance premium credit includes not just your income (and your spouse’s), but it may also include your dependents’ income.

6. If you are an employer not offering health care coverage, you may be penalized.

7. The law imposes a “net investment income tax” (NIIT) of 3.8% on individuals, estates, and trusts for which you may be liable.

8. You may be required to pay an additional 0.9% Medicare Hospital Insurance tax on wages and self-employment income on amounts earned above certain threshold amounts.

9. For calendar year 2015, if you are an employer or individual who provides minimum essential health care coverage to others, you are required to report the coverage information to those individuals and to the IRS.

10. Beginning in 2018, there will be an excise tax of 40% of the amount by which an employee’s health coverage premiums exceed certain threshold amounts.

As you prepare for the upcoming tax season, consider how the ACA will affect your tax return and your potential refund or balance due. I look forward to working with you to answer any questions you may have.

Please feel free to share this important information with your family, friends, and business associates. I would be happy to discuss these issues with any of your referrals.

Sincerely,

(YOUR NAME)

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