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4 Things that You NEED to Know About TurboTax, Taxes and Healthcare
Do you know the importance of understanding what the health care law means for filing taxes next year? TurboTax Health can provide you with the tools to understand and health care and your taxes. As taxpayers, make sure you protect your money by acting now and educating yourself because it will pay off in the end.
For most Americans, the ACA will affect their taxes minimally: most Americans will only need to check a box. The new requirement to report health care on your taxes does NOT mean people need to pay extra for a tax preparer – your hard earned money should go to care, not compliance. However the new requirement does mean that you NEED to have healthcare as long as you are working and filing taxes for 2014.
The problem is that many Americans were not aware that they need to purchase insurance. While the messages really have been out for a while, there are people who don't always know or care what is going on with regards to government.
1. FOR THE FIRST TIME, HEALTH CARE AND TAXES ARE COMING TOGETHER.
The Affordable Care Act (ACA) or Obamacare is designed to ensure everyone has health insurance and imposes tax penalties on those who don't. 2014 is the first year all Americans are required to maintain health insurance, so you'll be reporting it on your taxes in 2015. For most people (9 out of 10 taxpayers), complying with the ACA on taxes takes checking a box on their tax return to confirm they have health insurance.
TurboTax has been simplifying the federal tax code for the past 30 years and has done the same with the ACA. With software like TurboTax, you're never exposed to the ACA forms – TurboTax has already done the work for you and will ask you the questions you need to answer so you can be confident your taxes are done right.
2. MORE THAN 2/3 OF AMERICANS LIVE PAYCHECK TO PAYCHECK. IT IS ESSENTIAL THAT THEIR HARD-EARNED MONEY GOES TO CARE, NOT COMPLIANCE.
The average tax refund last year (tax year 2013) was around $2,800 (Source: IRS.) For Americans living paycheck-to-paycheck, this is the largest individual check they receive at one time. Unfortunately, many of the people who need this money the most, are the people paying the most to get their taxes done because they're not aware of the resources available to them. TurboTax Health can provide you with the tools to understand and health care and your taxes. Make sure you protect your money by acting now and educating yourself. It will pay off in the end.
3. TAXPAYERS WILL FALL INTO THREE CATEGORIES WHEN IT COMES TO ACA AND TAXES: THOSE INSURED THROUGH AN EMPLOYER, THOSE INSURED THROUGH HEALTH CARE EXCHANGES, AND THOSE WHO ARE UNISURED. HERE'S WHAT YOU NEED TO KNOW:
For most people (9 out of 10 taxpayers), complying with the ACA on taxes is a non-event because they have insurance through their employer, Medicaid, Medicare, or a private provider (Congressional Budget Office). They will just check a box on their tax return to confirm they have health insurance. There's no need to spend more on tax preparation.
Insured through Exchanges:
This year 8 million people became insured through healthcare.gov or their state exchange (Congressional Budget Office). Those who purchased insurance through the exchanges will receive a 1095-A form from healthcare.gov or their state exchange. They will enter information from their 1095-A on their taxes, just like they do with their W-2 forms.
Roughly 42 million people are uninsured in America (Congressional Budget Office). Those who do not have insurance and don't qualify for exemptions will pay a penalty of about $95 or about 1% of their income. If you're currently uninsured, think about buying insurance this year during open enrollment. TurboTax has a free calculator to estimate how much your penalty may be for 2014. The health care penalty is based on your family size and income. You can find the free calculator at TurboTax Health.
4. EXEMPTIONS: ABOUT HALF OF PEOPLE THAT ARE UNINSURED (23 MILLION) COULD QUALIFTY FOR AN EXEMPTION, BUT MOST PEOPLE ARE UNAWARE AND WILL END UP PAYING UNNECESSARY PENALTIES (CONGRESSIONAL BUDGET OFFICE).
Only 5% of people that qualify for an exemption have applied (TurboTax). There are a number of reasons why someone may be exempt from the penalty for not having health insurance, like not meeting the minimum income requirement. TurboTax Health offers free tools to help you understand if you might qualify for an exemption.
OTHER HEALTH CARE INFORMATION
Americans who can't afford health care through an employer or out of pocket, can enroll for insurance through the Marketplace and may even qualify for government assistance though premium tax credits and subsidies. To enroll for insurance through the Marketplace for 2015, Americans must sign up during open enrollment period, November 15, 2014 through February 15, 2015. This is definitely worth checking out. For a long time, we were people who didn't think that we could afford healthcare insurance but we do now!
Eligibility is generally determined by household income and family size. People can see if they're eligible for a subsidy by checking out TurboTax's health care calculator at TurboTax Health.
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I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.