The 2015 tax season will be the first where all filers must report their health insurance status. With the Affordable Care Act now in place, the new system will definitely impact your taxes.
If you bought health insurance on the new insurance exchanges, at the state or federal level, you can expect to receive a new tax form. Classified the 1095-A, this new form will lay out how much you have paid in premiums, as well as if you received a subsidy credit to help lower costs under the new Act. If you haven’t bought health insurance this year, you’ll be required to pay a penalty – or show proof that you’re exempt.
If you’ve faced financial hardship, you may have an automatic exemption. However, you may be required to prove your level of financial hardship to be exempt from paying a penalty. Potential hardships may include homelessness, bankruptcy, eviction or foreclosure, or unpaid medical expenses. If you’re a member of a religious sect with objections to insurance, you will also be exempt.
If you have gone without coverage under the Affordable Care Act thus far, it may be time to enroll. The current enrollment period will end on February 15th, and if you enroll now, you’ll avoid having to pay the penalty next year. This year’s penalty is a minimum of $95, but next year’s is jumping up by hundreds, becoming a minimum of $325.
Don’t wait to be footed with a huge bill out of nowhere. One of the best places to start is to estimate your tax bill today, whether on your own or with the help of an accountant or accounting software.