Taxpayers must show proof that they have health insurance

taxes-money

By My Fox Tampa

Love it or hate it, it’s here: tax season.

Electronic filing began on Tuesday. For the first time, millions of Americans will find out how the Affordable Care Act, better known as Obamacare, will impact their tax returns.

Taxpayers who purchased health insurance through the federal marketplace will be required to submit additional forms this year.

“Depending on your situation, it could be rather complicated,” said Dena Lebowitz, an enrolled agent with Tampa Bay Tax Services.

By the end of January, tax experts say Americans will receive a 1095 A form in the mail. The form is meant to show that the taxpayer and their dependents met the mandatory health insurance requirement through the federal or state exchange.

“Now, everyone needs to have health insurance,” said Lebowitz. “And they need to prove it, unless they qualify for one of the exemptions.”

Exemptions can vary greatly. Those who meet the exemptions requirement must show proof they were unable to afford health insurance, or they did not want it for religious (or other) reasons.

The most complicated of the new forms is said to be the 8962 Premium Tax Credit. Tax experts say many people will likely seek professional help in filling out the document, which has a lengthy set of instructions.

The 8962 requires tax payers to show proof of income earned in 2014. Tax credits were distributed for those who enrolled in Obamacare in 2014.

Participants were required to give an estimate of their annual income when applying. If that estimate is off from what they actually earned, the mistake could be costly.

“It’s sometimes hard to guess your income if you’re self-employed or you don’t get a regular wage,” said Lebowitz. “For example, if someone estimated that their income is $20,000 and it ended up being $30,000, then they got too much tax credit for that health insurance. They’re going to need to pay it back now,” Lebowitz added.

According to Forbes, H&R Block estimates up to half of all Americans who received subsidies for health insurance under Obamacare will owe the IRS money.

With budget cuts at the IRS, people calling for help with filing this year will likely face long waiting times.

Anyone unsure of how to fill out their tax documents should consult a professional tax service.

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