New Health Care Laws and Your Taxes

Posted by on Nov 25, 2014 in News | 0 comments

New Health Care Laws and Your Taxes

The Affordable Care Act has changed the health care insurance landscape since last year, and for the first time, health care and your taxes are now directly related. Millions of Americans will have to start making decisions about health care insurance now to be able to save more of their hard-earned money come tax time. The good news is that people have more options than ever for affordable health insurance and now is the time to find out what works best for you and your family.

Free online resources, like TurboTaxHealth.com, offer a guide on how the health care law affects you and your wallet, and has provided six simple tips to get you started:

If you’re not currently insured, act now to buy health insurance this year. Open enrollment began on Nov. 15, 2014, and ends Feb. 15, 2015. In order to get health insurance coverage that starts Jan. 1, Americans need to enroll by Dec. 15. For those who enrolled in the Marketplace in 2014, current coverage will automatically re-enroll on Jan. 1. If no action is taken, you will still have until Feb. 15 to decide if you want to change your plan in the Marketplace. You should still check your coverage to ensure that your network and costs are what you expect.

Don’t miss the three-month open enrollment period. If you miss this three-month window of opportunity, you will need to wait until the open enrollment period in 2016 to buy coverage unless you qualify for a special enrollment period. If you don’t have health coverage during 2015 that qualifies as minimum essential coverage, you must either pay a fee or see if you qualify for an exemption from paying the penalty. The fee in 2015 is steeper than it was in 2014 – 2 percent of your household income or $325 per adult/$162.50 per child, whichever is more. Get started now to avoid overspending. Visit www.Healthcare.gov for more information.

Understand if you qualify for an exemption from purchasing health insurance under the Affordable Care Act. Tax exemptions come in many forms. An exemption from the Affordable Care Act will eliminate your obligation to pay a fee for not having health insurance. You can find out if you’re eligible to waive the health care penalty fee with TurboTax Exemption Check.

Check if you’re eligible for a discount on health insurance premiums in the form of a tax credit. To help lower-income families and individuals pay for coverage, the federal government will provide financial support on monthly premiums and out-of-pocket costs via subsidies. To help offset the cost of buying insurance on the exchanges, tax credits are available, depending on your 2015 household size and income. Check out TurboTax’s free health care calculator to see if you are eligible.

If you purchased insurance through the state or federal exchanges, be sure to report major life events, change in income or changes like getting married, having a baby or if you received a raise. You can do this online by logging in to your insurance Marketplace account or calling the Marketplace Call Center. It is important to report any income changes to the Marketplace so they can change the amount of the tax credit applied to your insurance premium. This may also reduce any potential amount you would have to pay back at tax time. You also may be eligible for more subsidies than you’re getting, so it pays to double check.

Come tax time, report your insurance status when you file your tax return. If you get your insurance, whether through your employer, through Medicaid, Medicare or the Marketplace, reporting it is really a matter of checking a few boxes with TurboTax. Using the tax prep software you simply answer a few questions and check a box to confirm you have health insurance when you file your taxes and TurboTax does the rest.

Choosing health insurance is without a doubt a big decision, which is why it is important to consider all options before figuring out which is best for you. If you need a bit more assistance, there are a lot of free resources out there which offer helpful tools and answers to common questions.

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