There are a few key things to know about Obamacare when filing your taxes. Every state requires a minimum amount of health insurance to remain free of penalty from the government at tax time. If you are uninsured, you will most likely have to pay an ever-increasing penalty when you file your taxes. Fees for 2014 are 1% of your income, fees for 2015 will be 2% of your income, and the amount is likely to steadily increase as time goes on. Although there is a cap of about $1000 per family per year for being uninsured, that is a steep penalty for most people who depend on their tax refund money to keep them afloat during part of the year.
A few big changes have been made, and if you have done what was expected of you during the year, your taxes should be relatively easy to file without penalty. The Affordable Care Act was designed to help people who are uninsured or under-insured obtain medical coverage even with pre-existing conditions, and has changed the way that taxes are done for many people.
Many people will qualify for a government subsidy to help take care of most if not all of your insurance costs if they have purchased health care for themselves or their families through the Affordable Care Act. Depending on big life changes such as marriages, births, deaths, divorces, and in some cases natural disasters, you will have to fill out some new forms this year to ensure the accuracy of the amount of your health care subsidy.
If you have insurance through your employer, Medicaid, Medicare, or a personal insurance provider, you are already taken care of. Forms that accompany this situation are sent by your employer or insurance company to the IRS for verification purposes and should already be in the system and not need to do anything further. Some people still can’t afford insurance even with the new subsidies or with their income and will be exempt from any penalty that would otherwise be incurred for not having insurance. This is important to know and will be taken care of when you file your taxes. If you are having them done by a preparer, they will know what to do to find out if you are exempt from penalty this fiscal year.
If you do have to pay a fee for not having health insurance this year, it is easy to find deductions that will more than cover the amount of the penalty in most cases. Rates for the penalty will go up next fiscal year, so finding a way to obtain health care coverage through private providers or through Obamacare is a great idea to prevent having to pay extra out of your tax return next year. Every year, the penalty increases exponentially for being uninsured.
Obamacare covers most pre-existing conditions and medications as well. Some people who have never been able to get insurance before due to cancer, diabetes, and other illnesses that require medications that are otherwise unaffordable are now able to get insurance when they couldn’t before. Obamacare has made it much easier to have health care coverage for millions. Taxes are a little different this year and will be from now on thanks to the Affordable Care Act, but they are still easy to file if you take the time to understand what you are working with. Whether you are insured through work, Obamacare, or are still uninsured due to financial hardships, the changes that Obamacare has caused in the way we file taxes are manageable if you know what to do and who to talk to about your taxes.