As most of you are aware, as of January 1, 2014, Americans are required to have health insurance. If you had insurance through your employer, a private exchange or you purchased it directly from an insurance company, the mandate will not affect your taxes.
If you purchased insurance through healthcare.gov or one of the state exchanges it will affect your tax return. If you received the advanced premium credit, you will receive a 1095-A. A reconciliation will need to be completed on the return. You estimated your income when you purchased the coverage. You may receive a bigger tax credit or pay back some of the credit based on your actual income on the return.
If you did not have insurance for 3 or more months in 2014, then you may be subject to the penalty. The penalty is 1% of your income or $95 per adult and $47.50 per dependent under 18, up to $285 per family; whichever is higher.
As you can see from above, the penalties can be harsh. However, there are numerous exemptions available to avoid the penalty. Some of the exemptions are available by simply filing the tax return. However, most of the exemptions are available through the health insurance marketplace. Log into www. healthcare.gov/exemptions. Do this as soon as possible, the processing through healthcare.gov may take a few weeks.
If I can help you wade through this tax season, please give us a call at Pereira and Company at 678-799-7772.