Tax Season Is Almost Here! 3 Tips To Consider as You Get Ready

Marketplace Plans and 1095-A Forms

It’s springtime, which means that flowers, thunderstorms, and tax season are quickly returning. Though filing your taxes may be your least favorite activity on that list, rest assured that even a confusing tax year does not have to give you a headache. We’re here to help you make sense of what you need to know to file your 2020 taxes. Consider the following tips from your friendly health insurance broker in Santa Rosa as you get ready for this year’s tax season.

1. Understand the 1095-A Form

If you enrolled in a Marketplace health insurance plan last year, you should have received a 1095-A form by early February. You’ll receive this document from the Marketplace or your HealthCare.gov account, not the IRS — so be on the lookout for this to appear either online or in your physical mailbox. If you haven’t received it by mid-March, you should contact the Marketplace Call Center. Make sure that your address and phone number (or any other relevant contact information) are correct. If you moved in 2020, even if it was during the last week of the year, change your address as soon as possible.

2. Correct Any Errors on Your 1095-A Form

This part is incredibly important because if you send in the wrong information, you risk receiving a lower refund or having to pay more in taxes this year. Make sure that your coverage information is correct, that all members of your household who are covered are listed, and that the correct monthly premium is entered on the form. If you notice an error, contact the Marketplace Call Center immediately. Don’t reconcile yet or file the 1095-A form with mistakes on it! You’ll get a new 1095-A as soon as the error is corrected. 

3. Reconcile Your 1095-A Form Before You File

After you’re sure that your information is correct on the 1095-A form, you will “reconcile” your premium tax credit. This is a process that compares your advance premium tax credit used during the year to the premium tax credit you qualify for (this is income-based). The difference between the two amounts is then factored into your refund or the taxes you need to pay.

To reconcile, you will print Form 8962 along with its instructions and fill it out. This is where the 1095-A form comes into play: You will use the information on this form to fill out Form 8962. Remember, if your 1095-A is incorrect, your Form 8962 will be wrong, too. Take your time and ensure that you have completed every box and entered every amount correctly.

Do You Have Questions?

Taxes can be frustrating even in the easiest of times — which this last year certainly has not been. Trying to reconcile the past year’s financial, healthcare, and tax information in one place can be overwhelming. If you need help filing your taxes this year or understanding which policies may have changed in the last 12 months, don’t hesitate to reach out to Sackett Insurance. Get in touch with us today with inquiries related to health insurance and any questions you may have about filing your 2020 taxes.