The Affordable Healthcare Act has been rolling out for a few years now, but 2014 marks one of the biggest years of changes, as all U.S. citizens are now required to have health insurance in some form or another from January 1, 2014 and on. This also impacts taxes, whether you have health insurance or not.
For Those With Health Insurance In 2014
Your taxes won’t be affected much if you had medical insurance for the full 2014 calendar year. That said, make sure you check a new box on your 1040 (or 1040A or 1040EZ) that states that you’ve had insurance all year long. If the health insurance came from an employer, it’s even easier, as a simple ‘yes’ to this question is basically all you’ll need to do. Then your W-2 will reflect how much your health plan is worth, according to your employer. This number does not mean that your health plan is taxable, but it will help determine if you’re due for a tax credit or if you’re liable.
For Those With Health Insurance Marketplace Coverage
The ACA mandates a minimum coverage requirement, and you’ll need to document that you had this minimum through a variety of tax forms. For starters, and to help you, the Marketplace should have provided you with a 1098-A form. Additionally, to prove your coverage, there are now 1095 forms, which basically covers a statement that you have had insurance through the marketplace and proof that you’ve had qualifying insurance. (A 1095C form is required for those who had insurance through their employer). If you qualify for it, form 8962 (for a premium tax credit) will be need to be completed as well.
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For Those Without Health Insurance In 2014
Most affected in regards to taxes are those without health insurance. But contrary to popular belief, not everyone is “required” to have it. If you are exempt from coverage, form 8965 will need to be filled out. Some examples of exemption are if you only weren’t covered by insurance for three months of the year, or if you’re in a religious group that objects to health insurance, among many other reasons. If you simply cannot afford coverage, a premium tax credit is available and essentially acts as a discount to your health are deductible.
If you are not exempt, and you didn’t have coverage in 2014, then you may be penalized, depending on your income level, and you will owe a tax fee. The penalization starts at 1% of your income, or $95, whatever number is greater, but it can be as high as 2.5%. In other words, this is a either a flat fee or calculated as a percentage of household income.
You can learn more about how health insurance and the Affordable Healthcare Act affects your 2014 taxes by visiting irs.gov, or you can talk to a tax preparer. Online tax filing systems, like TurboTax or eFile, can also assist to make sure that all your forms are filed properly.
Elizabeth SanFilippo is a freelance writer, who enjoys trying new foods from all over the world. But her favorite city for culinary treats will always be Chicago. When not writing about food, she’s working part-time at a culinary vacation company, The International Kitchen, based in the Windy City. Some of her work can be found at Examiner.com.