The Year-End Tax Scramble & Why It Doesn’t Make Sense
It’s that time of year again: when the holidays are over and you remember that you need to hurry up and make those charitable donations before the year ends so you can get that nice tax break come filing season. Oh, and don’t forget about the deadline to sign-up for insurance through the Affordable Care Act before you file or you pay penalties. But why are these deadlines set up this way?
According to an article on Forbes.com, the Obama Administration wants to make the open enrollment period for ACA insurance even earlier next year, but is this the best decision? If the goal is to get more people to purchase insurance and more people to make charitable donations, why set up the deadlines so far from tax filing season?
Donate! Donate! Donate!
Sure, during the holidays, people are in a “giving” mood, but they are also shorter on cash and extremely busy with travelling and family events. Why push people to donate at a time of year when their mind is already on so many other things? It may make it easier to track legitimate donations and minimize errors to create an end of year deadline, but if the point is making charitable contributions, aligning the deadline with the filing deadline of April 15th would be much more effective. People who have filing taxes on the brain (as opposed to holidays) would be more likely to make donations. This schedule change was actually passed by the House earlier this year. Time will tell if it becomes the new official deadline for charitable donations.
Taxes Remind Us to Buy Insurance
What makes you remember to purchase insurance: the little notice that the enrollment period is open OR the prospect of paying penalties if you don’t have insurance when you file your taxes? If the government is trying to push for higher enrollment in ACA insurance, doesn’t it make more sense to align it with tax deadlines? That creates many more opportunities for marketing and education on the topic of health insurance.
Big & Little Pieces of Tax Reform
Tax reform is high-interest topic and requires both big and small changes to ensure that everything works most effectively and efficiently. We’ll have to wait and see what the new year brings! If you have any questions regarding your personal or business taxes, don’t hesitate to contact us at My Accounting Center at (877) 622-4621 or through our website contact form. We’ll be happy to help!