Tag Archives: California

2021 Tax Calendar

To help you make sure that you do not miss any important 2021 deadlines, we have provided this summary of when various tax-related forms, payments and other actions are due. Please review the calendar and let us know if you have any questions about the deadlines or if you would like assistance in meeting them.

Date Deadline for:
February 1 Businesses: Providing Form 1098, Form 1099-MISC (except for those that have a February 16 deadline), Form 1099-NEC and Form W-2G to recipients.

Employers: Providing 2020 Form W-2 to employees. Reporting income tax withholding and FICA taxes for fourth quarter 2020 (Form 941). Filing an annual return of federal unemployment taxes (Form 940) and paying any tax due.

Employers: Filing 2020 Form W-2 (Copy A) and transmittal Form W-3 with the Social Security Administration.

March 15 Calendar-year S corporations: Filing a 2020 income tax return (Form 1120S) or filing for an automatic six-month extension (Form 7004) and paying any tax due.

Calendar-year partnerships: Filing a 2020 income tax return (Form 1065 or Form 1065-B) or requesting an automatic six-month extension (Form 7004).

April 15 Individuals: Filing a 2020 income tax return (Form 1040 or Form 1040-SR) or filing for an automatic six-month extension (Form 4868) and paying any tax due. (See June 15 for an exception for certain taxpayers.)

Individuals: Paying the first installment of 2021 estimated taxes, if not paying income tax through withholding (Form 1040-ES).

Individuals: Making 2020 contributions to a traditional IRA or Roth IRA (even if a 2020 income tax return extension is filed).

Individuals: Making 2020 contributions to a SEP or certain other retirement plans (unless a 2020 income tax return extension is filed).

Individuals: Filing a 2020 gift tax return (Form 709) or filing for an automatic six-month extension (Form 8892) and paying any gift tax due. Filing for an automatic six-month extension (Form 4868) to extend both Form 1040 and, if no gift tax is due, Form 709.

Household employers: Filing Schedule H, if wages paid equal $2,200 or more in 2020 and Form 1040 is not required to be filed. For those filing Form 1040, Schedule H is to be submitted with the return and is thus extended to the due date of the return.

Trusts and estates: Filing an income tax return for the 2020 calendar year (Form 1041) or filing for an automatic five-and-a-half month extension to October 1 (Form 7004) and paying any income tax due.

Calendar-year C corporations: Filing a 2020 income tax return (Form 1120) or filing for an automatic six-month extension (Form 7004) and paying any tax due.

Calendar-year corporations: Paying the first installment of 2021 estimated income taxes.

April 30 Employers: Reporting income tax withholding and FICA taxes for first quarter 2021 (Form 941) and paying any tax due.
May 17 Exempt organizations: Filing a 2020 calendar-year information return (Form 990, Form 990-EZ or Form 990-PF) or filing for an automatic six-month extension (Form 8868) and paying any tax due.

Small exempt organizations (with gross receipts normally of $50,000 or less): Filing a 2020 e-Postcard (Form 990-N), if not filing Form 990 or Form 990-EZ.

June 15 Individuals: Filing a 2020 individual income tax return (Form 1040 or Form 1040-SR) or filing for a four-month extension (Form 4868) and paying any tax and interest due, if you live outside the United States.

Individuals: Paying the second installment of 2021 estimated taxes, if not paying income tax through withholding (Form 1040-ES).

Calendar-year corporations: Paying the second installment of 2021 estimated income taxes.

August 2 Employers: Reporting income tax withholding and FICA taxes for second quarter 2021 (Form 941) and paying any tax due.

Employers: Filing a 2020 calendar-year retirement plan report (Form 5500 or Form 5500-EZ) or requesting an extension.

September 15 Individuals: Paying the third installment of 2021 estimated taxes, if not paying income tax through withholding (Form 1040-ES).

Calendar-year corporations: Paying the third installment of 2021 estimated income taxes.

Calendar-year S corporations: Filing a 2020 income tax return (Form 1120S) and paying any tax, interest and penalties due, if an automatic six-month extension was filed.

Calendar-year S corporations: Making contributions for 2020 to certain employer-sponsored retirement plans, if an automatic six-month extension was filed.

Calendar-year partnerships: Filing a 2020 income tax return (Form 1065 or Form 1065-B), if an automatic six-month extension was filed.

October 1 Trusts and estates: Filing an income tax return for the 2020 calendar year (Form 1041) and paying any tax, interest and penalties due, if an automatic five-and-a-half-month extension was filed.

Employers: Establishing a SIMPLE or a Safe-Harbor 401(k) plan for 2020, except in certain circumstances.

October 15 Individuals: Filing a 2020 income tax return (Form 1040 or Form 1040-SR) and paying any tax, interest and penalties due, if an automatic six-month extension was filed (or if an automatic four-month extension was filed by a taxpayer living outside the United States).

Individuals: Making contributions for 2020 to certain existing retirement plans or establishing and contributing to a SEP for 2020, if an automatic six-month extension was filed.

Individuals: Filing a 2020 gift tax return (Form 709) and paying any tax, interest and penalties due, if an automatic six-month extension was filed.

Calendar-year C corporations: Filing a 2020 income tax return (Form 1120) and paying any tax, interest and penalties due, if an automatic six-month extension was filed.

Calendar-year C corporations: Making contributions for 2020 to certain employer-sponsored retirement plans, if an automatic six-month extension was filed.

November 1 Employers: Reporting income tax withholding and FICA taxes for third quarter 2021 (Form 941) and paying any tax due.
November 15 Exempt organizations: Filing a 2020 calendar-year information return (Form 990, Form 990-EZ or Form 990-PF) and paying any tax, interest and penalties due, if a six-month extension was previously filed.
December 15 Calendar-year corporations: Paying the fourth installment of 2021 estimated income taxes.
December 31 Employers: Establishing a retirement plan for 2021 (generally other than a SIMPLE, a Safe-Harbor 401(k) or a SEP).

Why Your Business Should Have an Active Social Media Presence

Free Vector | Illustration of social media marketing app

Did you know that the ad spend on Facebook grew by almost 30% in 2020? According to the same report, the trend indicated that business budgets were tightened. However, more budget was allocated to digital channels and social media. This is also the expected trend for 2021. If you’re still not investing in social media marketing, it’s time to get on board with the trends. Here are benefits you can get from it:

Boost Brand Awareness

One of the biggest advantages of having an active social media is the increase in brand awareness. Social media allows businesses a platform to reach out to users who may not have heard of them before. Social media also allows you to enable sending targeting ads. When you send relevant ads based on a user’s preferences, they are more likely to be interested in your content. This feature also allows you to target ads based on different criteria which may include location, gender, age, etc.

Increase Website Traffic and Leads

As more people see what you have to offer, you are likely to see an increase in website traffic. Since you are reaching out to targeted audience, you are also likely to see more traffic coming from qualified leads. This may lead to a boost in lead generation efforts. Not only that, you’re also likely to see a boost in average time spent on a website.

Pro Tip: To keep track of your leads coming from different platforms, use an advanced program specially designed for lead generation.

Improve your Brand Recall

A memorable social media marketing campaign can go a long way in creating a lasting impression in front of your target audience. It’s okay if users don’t purchase your product right away. If users can remember your brand easily, you can move them down the sales funnel with a few more touchpoints. Social media helps you boost your visibility and improve your ad recall. If you run a social media campaign for a long time, you can make sure that you are reaching out to more people and improving their ability to recognize your brand.

Get More Brand Credibility

Social media allows you to work with influencers to promote your products on different channels. Not only can you boost your reach and get more engagement, but you can also boost your brand credibility. Social media influencers work hard to build relationships with their followers.  Because of their expertise, they hold credibility in their field and therefore, their followers wait for their recommendations and advice. In addition, other sponsored content can also help you establish your brand as a thought leader in the industry.

Get more Engagement

When you upload content on social media that resonates with your audience, they are likely to respond to it. You’ll get more likes, shares, and comments if the content strikes a chord with them. This can result in a boost in engagement. You can also do things like host contests, create polls, and publish live videos to keep your audience entertained. These things matter because  in order to turn a prospect into a customer, you need to keep them engaged. It’s a stepping stone in the right direction.

Get Detailed Customer Insights

One of the biggest advantages of advertising through social media is that you can get access to customer insight. All social media platforms collect user data. From user insights to demographics, these platforms record all kinds of behavioral data. When you run an ad campaign, you can also see how people are engaging with your content. This data can help you figure out which content your audience resonates with the most. Based on that, you can create a more robust content and marketing strategy.

This data can help you learn how to get the most out of your ad spend. In the long run, it can help your business save money and get the most out of your budget through campaign optimization. Once you have data on what works, you can leverage retargeting to follow up multiple times with users who may be interested in your brand. This, in turn, can help you boost your conversion rate.

Conclusion

Regardless of your industry or business size, social media can be a powerful tool to grow your business. It can help you get more visibility, reach out to a broader audience, and generate more qualified leads. Not only can it help you increase your sales and revenue, it can also help you create more cost-effective campaigns. You can leverage social media to gain more credibility and improve your brand recall value. By tracking your campaign results, you can optimize future social media campaigns for better results. Don’t miss out on the multiple benefits social media can offer.

IRS Expected to Audit More Small Businesses in 2021

After years of low examination rates, the IRS announced it will increase audits of small businesses by 50 %. This news comes during a time when complex tax law changes and economic stimulus programs, in response to COVID-19, have made businesses’ books even more complicated than usual.

Tax Audit Vector Images (over 3,100)

The Illinois CPA Society cautions this could lead to audits and enforcement actions against many different businesses. These businesses range from long-held family-owned operations to the many online businesses launched as the pandemic drags on.

With the IRS planning to hire more specialized auditors to begin strengthening its enforcement efforts, ICPAS offers the following tips to safeguard your business interests and help avoid an audit:

Keep Clear Records

Accurately and honestly reporting all income, deductions, credits, expenses, and other figures can help keep an audit at bay. Make sure you have adequate documentation to support the figures reported on your business’ information return. This will make your individual tax return less likely to be have errors or be audited.

Mind your deductions

Unusual itemized deductions raise red flags for auditors, especially now that most taxpayers only claim the standard deduction. If your small business is driving you to seek unique deductions or report business losses, enlist the help of a CPA to guide you. Reporting losses for three years or more could increase your risk of an examination into whether you’re actually in business.

Make your estimated tax payments

If you anticipate owing more than $500 in taxes for your business entity throughout the year, you should be making quarterly estimated tax payments. Failing to make these payments raises your risk of an audit and/or penalties.

Go Digital

Today’s bookkeeping software utilizes tools to keep your records accurate and secure. This helps your CPA electronically prepare and file your tax returns—the best method for preventing the filing of erroneous returns that might trigger an audit.

Read up on the rules

Since many small businesses are formed as partnerships, it’s important to determine if yours is subject to the Centralized Partnership Audit Regime, which dramatically changed IRS partnership audit procedures.

4 Ways to Improve Your Company’s Sales

Most salespeople would tell you that there are few better feelings in life than closing a deal. This is because guiding a customer through the sales process and coming out the other side with dollars committed isn’t a matter of blind luck. It’s a craft — based on equal parts data mining, psychology, intuition and other skills. Many sales staffs were under unprecedented pressure last year. The COVID-19 pandemic triggered changes to the economy that made many buyers cut back on spending. Now that the economy is slowly recovering, sales opportunities may be improving.Growth clipart sale growth, Picture #2783288 growth clipart sale growth

Here are four steps your salespeople can follow to improve the odds that those chances will come to fruition: 
1. Qualify prospects. Time is an asset. Successful salespeople focus most or all their time on prospects who are most likely to buy. Viable prospects typically have certain things in common:
  • A clear need for the products or services in question
  • Sufficient knowledge of the products or services
  • An identifiable decision-maker who can approve the sale
  • Adequate financial standing
  • A need to buy right away or soon.
If any of these factors is missing, and certainly if several are, the salesperson will likely end up wasting his or her time trying to make a sale.
2. Ask the right questions. A salesperson must deeply understand a prospect’s motivation for needing your company’s products or services. To do so, inquiries are key. Salespeople who make great presentations but don’t ask effective questions tend to come up short. An old rule of thumb says: The most effective salespeople spend 80% of their time listening and 20% talking. Actual percentages may vary, but the point is that a substantial portion of a salesperson’s “talk time” should be spent asking intelligent, insightful questions that arise from pre-call research and specific points mentioned by the buyer.
3. Identify and overcome objections. A nightmare scenario for any salesperson is spending a huge amount of time on an opportunity, only to have an unknown issue come out of left field at closing and kill the entire deal. To guard against this, successful salespeople identify and address objections during their calls with prospects, thereby minimizing or eliminating unpleasant surprises at closing. They view objections as requests for information that, if handled correctly, will educate the prospect and strengthen the relationship.
4. Present a solution. The most eloquent sales presentation may be entertaining, but it will probably be unsuccessful if it doesn’t satisfy a buyer’s needs. Your product or service must fix a problem or help accomplish a goal. Without that, what motivation does a prospect have to spend money? Your salespeople must be not only careful researchers and charming conversationalists, but also problem-solvers. When you alleviate customers’ concerns and allow them to meet strategic objectives, you’ll increase the likelihood of making today’s sales and setting yourself up for tomorrow’s. 

Top Year-End Tax Tips

As we’re all aware, 2020 has been an extraordinarily complex year — that complexity is reflected in taxpayers’ tax situations, whether they’re businesses or individuals. While there is plenty of time before this year’s tax returns need to be filed, the constantly changing economic situation, the presidential election, and the host of COVID-19 legislative provisions mean that some tax moves will only be effective if they’re made before the end of the year.

We’ve brought together some of our best year-end tax-planning coverage, ranging from reminders of classic strategies to deep dives into rules specific to COVID-19 tax relief. For each article, we’ve highlighted a strategy or two, but they all offer a host of potential tax savings — for those who act fast.

For businesses and individuals:

charitable donations.jpg

In early October, Top 10 Firm Grant Thornton put together a list, a mix of strategies for both companies and individual taxpayers, including:

  • Making sure to use the above-the-line charitable deduction
  • Accelerating AMT refunds
  • Taking advantage of new bonus depreciation rules from the CARES Act

New for the end of the year:

A printout of Congress's tax reform bill, "The Tax Cuts and Jobs Act," alongside a stack of income tax regulations

In an interview, Wolters Kluwer’s Mark Luscombe dives into some of the most important new year-end planning issues, including:

  • Employee tax credits and deferrals related to payroll taxes that expire at the end of 2020
  • Tax provisions that offer retroactive relief
  • The implementing expiration of the expanded ability to make penalty-free withdrawals from retirement plans

Expiring Relief: 

congress-fotolia.jpg

With a number of COVID-19 related tax relief provisions, Laura Davison of Bloomberg News talks about how year-end planning has been turbocharged. Here are the provisions set to expire:

  • The removal of the cap on individuals’ business loss deductions
  • The one-time deduction for charitable gifts for taxpayers taking the standard deduction

Planning around the election: 

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Tax planners knew that the November election could have a major impact on year-end planning. Particularly, if a Biden win brought in a whole new approach to tax legislation. Accounting Today columnist Mark Luscombe, of Wolters Kluwer, offered strategies for both possible outcomes in Georgia, including:

  • With a Republic win, focusing more on tax-loss harvesting and less on Roth IRA conversions
  • With a Democratic win, preparing for the possibility of higher capital gains and income tax rates

Three-quarters of the way there: 

Coronavirus mask billboard in Times Square

In a column just before the election, Wolters Kluwer’s Mark Luscombe summarized the year-end planning developments thus far in the year including:

  • The restoration of NOL carrybacks for up to five years
  • A number of COVID related corrections and extensions to the Tax Cuts and Job Acts of 2017
  • COVID-19 sick leave and family leave, and employee retention provisions

Acceleration and declaration:

Office expenses

After a “year like no other” this early December list from AG FinTax’s Anil Grandhi included tips on lowering taxes by:

  • Accelerating business purchases
  • Adding children or spouses to the payroll
  • Deferring or accelerating income

From one year to another:2020 to 2021 with cubes

Not everything can be wrapped up by the end of the year. Accounting Today’s senior tax editor, Roger Russell, covers the issues from 2020 that will have an impact on 2021:

  • The tax impacts of remote work
  • How to handle emergency retirement plan withdrawals under the CARES Act
  • The taxability of unemployment benefits

In under the wire:U.S. Capitol

While many of them don’t need to be taken up by December 31st, the last-minute COVID relief legislation signed by President Trump included a number of tax provisions including:

  • Passage of a number of tax extenders
  • An extension of the Work Opportunity Tax Credit
  • Improvements to the Employee Retention Credit

California Proposition 19

  1. Scope – What is the purpose/ subject of this memo

The purpose of this memo is to discuss California Proposition 19, which is also referred to as The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act. This measure was approved by California voters in November 2020. This memo will provide an explanation of the new Proposition and compare it to the existing law. Additionally, the memo contains a list of topics to consider as a result of the passage of this new law.

 

  1. Analysis – Existing Law (ARTICLE XIII A of the California Constitution)

The existing law is under Proposition 13 which was passed in 1978. Under this law, the following was true:

  1. Property tax is limited to 1% of a home’s taxable value, based on when the home was purchased, and thereafter, the appraised value of the property when purchased, newly constructed, or a change in ownership occurs, subject to an annual inflation adjustment not to exceed 2%.
  2. For taxpayers 55 years or older or any severely and permanently disabled person residing in the property eligible for the homeowner’s exemption, they can transfer the base year value of that property to a replacement dwelling of equal or lesser value located in the same county, or another county that has adopted an ordinance allowing base years value transfers from other counties, as provided. Eligible taxpayers were able to utilize this one time.
  3. The purchase or transfer of the principal residence, and the first $1,000,000 of other real property, of a transferor in the case of a transfer between parents and their children, or between grandparents and their grandchildren if all the parents of those grandchildren are deceased, is not a “purchase” or “change in ownership” for purposes of determining the “full cash value” of the property for taxation. Additionally, there is a restriction on how much that taxable value can go up each year, even if a home’s market value increases much more.

 

  • Analysis – New Tax Law (Assembly Constitutional Amendment No. 11)

Proposition 19 changes the existing law in the following ways:

  1. Homeowners who are 55 or older or who have lost a home in a natural disaster can now transfer their tax assessment from their previous home to a new more expensive home. This can be done up to three times, instead of the previous one-time allowance.
  2. The measure eliminates the exclusion for reassessment when a house transfers to a child or a grandchild. The child or grandchild must actually use the residence as their primary residence to avoid reassessment. Previously, there was no requirement for the inheritor to utilize the house as their primary residence.
  1. Topics to Consider
    1. Who does this help and how?

 

CA proposition 19 benefits homeowners who are 55 years old or older. When they move to a new and more expensive residence, they can blend the taxable value of their old house with the purchase price of a new, more expensive home, reducing the property tax payment they would otherwise face. This benefit would also extend to disabled taxpayers and taxpayers who have lost their homes in wildfires or other natural disasters.

 

“For example, a qualifying homeowner who owns a home with a taxable value of $200,000 that is worth $600,000 on the market would pay roughly $2,200 in property taxes now. If the homeowner moves to a $700,000 house, the homeowner will pay $3,300 a year in property taxes under Proposition 19. Without the initiative, the same homeowner would pay $7,700 annually at the new home.” (LA Times)

 

Based on the example provided by the LA Times, a qualifying homeowner who owns a home with a taxable value of $200,000 that is worth $600,000 on the market would pay roughly $2,200 in property taxes now. If they move to a $400,000 house, it would be expected that if the new home is less than the $600,000 market value of the old home, then the property taxes would be unchanged.

 

  1. Who does this hurt?

 

The group of people who would be hurt by proposition 19 are the children who will inherit the properties from their families and intend to rent it out or keep it as a second home. If the child or grandchild that inherited the property does not utilize the property as their primary residence, the property tax will be reassessed based on the market value and thus the children or grandchildren would lose the ability to retain the tax basis that was based on the original purchase price.

 

 

  1. Are there any exceptions?

 

As we discussed above, for the children who will inherit the properties from their families and intend to rent it out or keep it as a second home, the properties will be reassessed, and the tax base would go up based on the market value consequently. However, Prop 19 does not change any of the ownership rules for properties owned by legal entities, which generally provide that legal entity interests can be transferred from current owners to new owners without triggering a reassessment, subject only to the change in control rule and cumulative ownership rules. This legal entity rule is sometimes referred to as “The Dell Maneuver” because Michael Dell purchased the Fairmont Miramar Hotel in Santa Monica without triggering a reassessment. It should be noted that there are regular attempts to close off the Dell Maneuver legislatively, but none have succeeded to date. Accordingly, individual owners would therefore have an incentive to transfer their property to a legal entity to avoid future reassessment.

 

  1. Important Date

The deadline to transfer real properties without triggering the new reassessment rules under Prop 19 is February 15, 2021.

 

Generally, your estate attorney or attorney will be able to advise you in these matters.  We recommend you speak with your legal counsel if you desire to implement any changes related to Prop 19.

 

Helpful Links:

https://www.boe.ca.gov/prop19/

 

https://www.boe.ca.gov/proptaxes/pdf/lta20061.pdf

Potential California Tax Increases

Democrats are at it again in California.  I personally feel that the majority of bills created by California Democrats DO NOT support what the residents of California wants. So, let’s talk about a new one, AB 1253, which can be viewed at http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1253

 

The California Democrats  have proposed a significant tax hike on taxable income of $1 million and higher. Legislators say the tax hike would raise more than $6 billion a year to help K-12 schools and government services hurt by the coronavirus pandemic.  I don’t know about your, but I have heard many times in the past that additional taxes and fees were going to the schools, for example the Lottery proceeds were supposed to go to the school, but what they didn’t’ communicate was they were taking away existing funding, and replacing it with Lottery.  In California we pay one of the highest state income taxes, sales tax, and gas tax.  I personally feel as a CPA and business owner, we the people need to tell our representatives, NO MORE TAXES and they need to become fiscally responsible.

 

Anyway, here are the tax rates that AB 1253 is proposing:

 

  • A 1% tax on income above $1 million, but not over $2 million
  • A 3% tax on income over $2 million, but not over $5 million
  • A 3.5% tax on income over $5 million

 

The bill would apply retroactively to tax years beginning on or after January 1, 2020, and would be permanent.

 

Under existing law, the highest tax rate for individuals is 12.3%, but when your income is over $1,000,000 there is  an additional 1% for income over $1 million often called a “mental health tax”.   With all the mental health tax collected, California shouldn’t have a mental health problem.  However, look at our homeless challenges.  Again, from a business perspective, the State seems to just be out of control in spending and just wants to tax the residents more and more and have no accountability.

 

If AB 1253 were enacted, the 13.3% rate would rise to 14.3% for incomes above $1 million and the state’s highest rate would be raised to 16.8% for incomes above $5 million.

The proposal would result in a top tax rate of nearly 54% for federal and state taxes for the highest earners.   If Biden is elected, he has already stated he would roll back the Trump tax cuts, so the combined tax rate would increase even more.

 

California already has the highest state tax rate at 13.3%, Hawaii is the second highest at 11%.  Most other states have a state tax of about 6%, and  Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming do not have an income tax.

 

The continued tax increases are going to continue to move wealthy individuals out of the state.  However, a change of residency needs to be done right, so if you are considering to change your residency, please contact us.  Most of the clients we have helped with changing residency, have done so properly and maintain a second home in California.

 

At this point, we highly recommend that you contact your State representative, and voice your opinion on the proposed tax increase and perhaps a discussion about fiscal responsibility.  Please contact us at 949-756-8080 if we can be of assistance.

4 New Ways You Can Avoid Fines For Not Having Health Insurance

There are already more than a dozen reasons people can use to avoid paying the penalty for not having health insurance. Now the federal government has added four more “hardship exemptions” that let people off the hook if they can’t find a marketplace plan that meets not only their coverage needs but also reflects their view if they are opposed to abortion.

It’s unclear how significant the impact will be, policy analysts said. That’s because the penalty for not having health insurance will be eliminated starting with tax year 2019, so the new exemptions will mostly apply to penalty payments this year and in the previous two years.

“I think the exemptions … may very marginally increase the number of healthy people who don’t buy health insurance on the individual market,” Timothy Jost, emeritus professor of law at Washington and Lee University in Virginia who is an expert on health law.

Under the new rules, people can apply for a hardship exemption that excuses them from having to have health insurance if they:

  1. Live in an area where there are no marketplace plans.
  2. Live in an area where there is just one insurer selling marketplace plans.
  3. Can’t find an affordable marketplace plan that doesn’t cover abortion.
  4. Experience “personal circumstances” that make it difficult for them to buy a marketplace plan, including not being able to find a plan in their area that gives them access to specialty care they need.

In California, two of those exemptions will be particularly relevant — the one related to abortion coverage and the one for people in counties where only one insurer sells through the state’s Affordable Care Act marketplace, Covered California.

The first new exemption, for people in areas with no marketplace plan, isn’t relevant for consumers anywhere in the United States this year. Since the Affordable Care Act’s marketplaces opened, there have been no “bare” counties.

However, in about half of U.S. counties — in which 26 percent of enrollees live — there is only one marketplace insurer this year, according to the Kaiser Family Foundation. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)

This includes California, where Anthem Blue Cross exited six counties and other communities this year, leaving an estimated 60,000 people with only one insurer.

The counties of Monterey, San Benito, San Luis Obispo, Santa Barbara, Inyo and Mono were left with only one insurance option: Blue Shield of California.

As for the abortion exemption, in many places it won’t be an issue either. Women in 31 states didn’t have access to a marketplace plan that covered abortion in 2016, according to a Kaiser Family Foundation analysis.

By California law, abortion services must be covered in marketplace plans as well as by Medi-Cal, the state’s Medicaid program, and by most private health plans outside of the marketplace — except employer-funded ones. That means women in the Golden State might have trouble finding insurance that excludes abortions, experts said. New York and Oregon also have similar laws.

The ACA established several different types of exemptions from the penalty for not having coverage. Among them are exemptions for not being able to find coverage that is considered affordable or being without insurance for less than three consecutive months in a year. People claim these more common exemptions when they file their tax returns.

Hardship exemptions that had already been on the books protected people who faced eviction, filed for bankruptcy or racked up medical debt, among other difficulties. Consumers apply for these exemptions by submitting an application to the ACA insurance marketplace.

The new hardship exemptions apply to people in all 50 states, according to an official at the federal Centers for Medicare & Medicaid Services, which oversees the health law’s insurance marketplaces. To apply, people generally need to provide a brief explanation of the circumstances that made it a hardship for them to buy a marketplace plan, along with any available documentation, when they submit their application to marketplace officials. They can apply for the current calendar year or going back two years, to 2016.

It’s difficult to gauge how many people will try to take advantage of the changes, said Tara Straw, a senior policy analyst at the Center on Budget and Policy Priorities.

“People aren’t sure how to apply or if they’re eligible, and that discourages them from applying,” Straw said.

The penalty for not having health insurance in 2018 is the greater of $695 or 2.5 percent of household income.

During the 2017 filing season, there were more than 106 million tax returns reporting that all family members had health insurance, and nearly 11 million tax returns that claimed an exemption from the requirement to have it, according to a report from the Treasury Department’s inspector general for tax administration. In addition, more than 4 million returns reported paying penalties totaling nearly $3 billion for not having health insurance.

People often don’t realize they may owe a penalty until it’s time to do their taxes, said Alison Flores, a principal tax research analyst at H&R Block’s Tax Institute. H&R tax preparers first work to see if clients can qualify for an exemption that can be claimed on their tax returns. If that doesn’t work, they move on to the hardship exemptions. The preparers help people get the hardship exemption application, but it’s up to consumers to send it to the marketplace and get the exemption certificate.

The federal guidance about the new exemptions was released April 9, shortly before the end of the income tax filing season. People who’ve already filed their taxes and qualify for the new exemptions for 2016 or 2017 and get marketplace approval can file an amended tax return to receive a refund of any penalty they paid, said Katie Keith, a health policy consultant who writes regularly about health reform.