Posts Tagged "affordable care act and taxes"

Do You Qualify for an Insurance Tax Credit?

Posted by on Dec 16, 2014 in News | 0 comments

Health insurance and income taxes, once an unlikely pair, are now close companions as a result of the Affordable Care Act’s insurance mandate that took effect Jan. 1, 2014. If you have health insurance through the federal or a state-sponsored marketplace insurance, it means a couple of important yet simple changes on your next income tax return. First, you’ll receive a new tax form from your marketplace around Jan. 31, 2015. Form 1095-A, Health Insurance Marketplace Statement, will include the information you need to report on your federal tax return in order to prove you have health insurance. Form 1095-A will also include information you need for the premium tax credit, a tax benefit to help pay for marketplace insurance. The credit amount is based on household size and income. In general, the lower your income, the higher your credit amount. In order to qualify for the premium credit:   * You must be ineligible for government programs like Medicare, Medicaid and CHIP. * You cannot have employer-sponsored insurance, or the lowest-priced, self-covered plan meeting minimum essential requirements offered by your employer costs more than 9.5 percent of your annual household income. * Your annual household income is 100 percent to 400 percent of the federal poverty level. For the 2014 credit, that’s $11,490 to $45,960 for an individual. (Hawaii and Alaska residents are subject to different amounts.) * You cannot be claimed as a dependent on someone else’s tax return. * Your filing status generally cannot be married filing separately. The credit can be received in advance in order to reduce the cost of your monthly premiums, or you can wait to claim it on your tax return to reduce your amount owed or increase your refund. If your income or family size is different than what you estimated when you applied for marketplace insurance, your taxes may be impacted. If your actual income was less than estimated, you may qualify for a higher credit amount and therefore receive a larger refund. On the other hand, if your actual income was more than the estimated amount, you may need to pay some of the credit back at tax time. DIY tax solutions make reporting marketplace insurance and the premium credit a simple matter. “You can still easily prepare and file your own taxes,” says Jessi Dolmage, spokesperson for TaxACT. “Just enter Form 1095-A information when the program asks and answer some simple questions. The program will complete the calculations and tax forms to help you get every dollar you deserve.” If you plan to enroll in marketplace insurance during the next enrollment period, Nov. 15, 2014, through Feb. 15, 2015, Dolmage recommends calculating your taxes beforehand. “You’ll need to enter some tax information on your marketplace application. TaxACT makes that easy. Complete the easy interview and the program will generate a HealthWatch report with all the tax information you need to apply for insurance and the premium credit.” Dolmage also reminds uninsured individuals planning to claim an exemption to visit healthcare.gov/exemptions to check if your situation requires an exemption certificate number (ECN). If so, mail the paper application and supporting documentation to your marketplace now because it can take weeks to process. After your application is accepted, you’ll receive an ECN to report on your tax return in order to avoid the individual shared responsibility payment. Learn more about the premium tax credit at www.irs.gov and healthcareact.com. To get the HealthWatch report and file your federal taxes free with TaxACT Free Edition, go...

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New Health Care Laws and Your Taxes

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

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...

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