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 and you must report your health insurance status on your 2014 taxes filed in 2015. Don’t worry, TurboTax has been simplifying the federal tax code for the past 30 years and has done the same with the new ACA tax rules.
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. 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.
We have compiled a list of the most often asked questions and answers to make this process easier.
Q. Will I have to pay a professional accountant or CPA to prepare my taxes?
A. TurboTax Health can provide you with the tools to understand the new health care rules and your taxesThe 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.
Q. What information will I need to provide?
A. Insured Through an Employer:
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). The TurboTax software will simply ask you to confirm that you have health insurance.
A. 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. TurboTax will ask you to enter information from your 1095-A form, just like with your W-2 form.
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 offers 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.
Q. How do I know if I qualify for a health care exemption?
A. Only about 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.
Q. How do I enroll for insurance through the Marketplace for 2015?
A. Americans who do not qualify for healthcare through an employer, can enroll for health insurance through the Marketplace and may even quality for government assistance through premium tax credits/subsidies. They must sign up during the open enrollment period of November 15th, 2014 to February 15, 2015. 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.
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.