How to Handle your Taxes Post-Obamacare
Tax season is upon us, and with the Obamacare health insurance penalty to take into consideration (as well as the subsidies associated with the new state healthcare marketplaces), things might get a little bit complicated, depending on your exact situation. Depending on how you got your insurance and who’s providing it, you may have to file your taxes a little bit differently, so we’re here to give you a crash course in what forms you need, what boxes to tick, and what documents to expect this tax season (and beyond). There are a few extra steps you have have to take, so let’s get started!
– If your employer is providing your coverage…
Prepare to hear this phrase a few times throughout this guide: Tick the box on line 61 of your Form 1040 to indicate to the government that you had/have healthcare insurance. That’s step one, no matter how you bought or received your coverage. In addition to that, your employer may or may not send for Form 1095-C. If they don’t, there’s no cause for alarm. Employers aren’t required to send this form at all until next tax season, and while it does contain useful information about your employer-provided health insurance, it doesn’t contain any information essential to your taxes.
– If you purchased your insurance through a state exchange (or HealthCare.gov)…
Here’s where things get a little bit complicated, so don’t be afraid to contact a professional if you need help. Step one is, again, checking one of the boxes on line 61 of Form 1040 to indicate that you had health insurance in the past year. You should also receive a Health Insurance Marketplace Statement (Form 1095-A) from your state by January 31st. Included in this statement is information about your own insurance coverage as well as information about premiums used to calculate your subsidy. This form does contain information that you’ll need to complete Form 8962, “Premium Tax Credit”, to see how your income compares to your expected income and determine whether or not you’re entitled to more subsidy or if you will need to pay some back.
– If you bought your coverage independently…
If you’re still looking for health insurance in California, we’d be happy to help you out, but if you’ve already purchased coverage independently of the exchange or your employer, your process will be slightly different from the above, but not too much. Again, you’ll want to check that box on line 61 of Form 1040, but once you’ve done that, you don’t need to take any further action. You may receive Form 1095-B from your insurance provider, but insurance companies won’t be required to send this out until next tax season, so many companies won’t be sending these out quite yet.
– If you don’t have health insurance…
We can help with that! You can also visit HealthCare.gov by February 15th to take advantage of open enrollment and find a policy that will save you from paying the new fees associated with Obamacare. If it’s too late for all of that, visit TurboTax’s Exemption Checker to see if you qualify for an exemption from the fee. If you are, you’ll need for file Form 8965 and claim your exemption. If not, you’ll need to calculate your penalty and report it on line 61 of Form 1040. You’ll have to pay the fee this year, but don’t delay. Get health insurance, because next year, that fee will roughly double.
Follow these steps, don’t forget to claim your exemptions, and spread this article around to save your friends and relatives a bit of confusion! Tax season is a bit trickier than usual this year, and a little preparation can go a long way to saving you time and money.
Do you file your own taxes, or do you use a tax preparation service? How do you feel about Obamacare as a whole? Don’t be shy, and comment below to chime in on the discussion!
