No matter how you feel about the Affordable Care Act (ACA), it’s in your best interests to at least understand how it works as well as how any subsidy you received through the ACA works. Knowledge is most certainly power, and it could be just the thing to keep you out of financial hot water. Sackett & Associates Insurance Services wants you to know how changes in your income or family size impact your taxes and subsidy.
The first thing you should understand about a tax subsidy is that it’s essentially an advance that’s applied to your health care coverage premiums. The amount of the subsidy you receive is determined by the income estimate and family description you noted on your Health Insurance Marketplace application. If you overestimated how much of a subsidy you would need, you’ll have to pay back the extra amount. If you underestimated, you’ll receive the difference in the form of a refundable credit after filing your income tax return.
Keep in Touch
To avoid cutting the IRS a check when tax season rolls around, it’s best that you keep your health insurance broker in the loop on any changes to your income or your family as soon as you’re aware of them. This way, the Health Insurance Marketplace can make the necessary changes to your information and adjust your subsidy accordingly. Not only should you tell your broker if your income or family size changes, you should also inform her or him if you get a job-based insurance plan starting or if you become eligible for Medicare coverage. Just make sure you’re clear about whether you’ll have to pay a penalty for not having coverage.
The California health insurance experts of Sackett & Associates Insurance Services are readily available to answer any questions you might have about the Affordable Care Act and health, vision, dental and live coverage plans. Call us at 707-823-3689, like us on Facebook and feel free to subscribe to our blog for trusted health insurance information.
Understanding How The ACA Will Affect Your Filing
Tax season is a stressful time for many Americans. By April, you have to have gathered all of your paperwork from the previous year, sorted through it, at least partially understood it, and comprehended how you are supposed to report it to your state and federal governments. It can feel overwhelming to take on, and will unfortunately only get more complicated due to the changes implemented by the Affordable Care Act (ACA).
When you file your taxes this spring, you will be expected to report information about the health insurance coverage you had for the 2014 calendar year. This means you will have to go through a couple more steps when you file, but if you carried the legally required amount of coverage you should not have too much trouble completing this portion of your tax return.
Furthermore, if you get your health care coverage through your workplace, filing this information with your taxes will be even easier. All you will need to do is check the box on the revamped Form 1040, saying that you carried minimal essential coverage in 2014.
All in all, the government is doing everything it can to ensure that Americans are able to accurately report their information when filing their taxes this year. Everyone is learning how to abide by these new regulations this year, so the IRS is working to make information about the process easily available. If you are confused about what is expected of you when it comes time to file, do not be afraid to reach out to the experts for help.
You should not be left trying to navigate the changing world of healthcare in the United States alone. To get a healthcare expert on your side, contact Sackett & Associates Insurance Services today. Serving Sonoma County, we are here to help you get the coverage you need, and actually understand it.
Since open enrollment is now open, it is important to make sure that you sign up for health care coverage. If you do not sign up for coverage during this time, you will not have any health insurance for the upcoming year and will face heavy fines.
The fines for not having health care coverage in 2015 are much more expensive than the fines of not having coverage in 2014. If you do not sign up for coverage during open enrollment, you will have to pay 2 percent of your yearly household income or $325 per adult and $162.50 per child under 18 in your household for the year, whichever amount is higher. This amount is higher than the 1 percent of your yearly household income or $95 per adult and $47.50 per child for the 2014 penalty.
Keep in mind that the 2 percent penalty of your yearly household income, only the amount of your income that is above the tax filing threshold, or about $10,000 for a single person, is used to figure out the fine. The maximum amount of the 2 percent penalty is the national average premium for a bronze level health care plan. The maximum amount per family using the second flat rate is $975 per year.
For 2016, the penalty increases again, up to 2.5 percent of your yearly household income or $695 per person.
The health insurance coverage penalty will come out of your federal income tax return that you file for the year. For 2015, most people will file their return early in 2016.
For more information on open enrollment and your health insurance choices, contact Sackett & Associates Insurance Services in Santa Rosa, California. We will help you find the right policy that will fit all of your needs.