If you’ve purchased health insurance coverage, you are already basking in the glory of thinking that you and your family members are covered if anyone from your family falls sick. This year, there’s another good news for you! You won’t be required to pay any penalty charges to the government when you file your taxes. But would that be applicable if you only had coverage for a certain portion of the year or if you received monetary assistance from the federal government to reduce the cost of your monthly payments? Yes, there are many doubts among the insurance policy holders about their tax deductions. Here are a few things that you need to know about taxes and health insurance.
What actually is individual mandate how does it have an impact on your taxes?
The individual shared responsibility provision is also known as individual mandate and according to it, everyone who can afford to carry a health insurance coverage need to purchase one or pay a penalty on taxes. If you’re someone who can afford to have health insurance coverage but you choose not to buy it, the penalty charges will apply on you until you qualify for an exemption from health coverage. The amount that you have to pay as penalty for failing to get health coverage varies from one person to another.
What if I had health coverage for only a small portion of the year?
As per the Centers for Medicaid & Medicare services, you aren’t needed to pay penalty if you carried health insurance coverage for more than 9 months in the year 2014 or if you’re qualifying for an exemption. If you had already received an exemption and you wish to apply for one, you have to fill out form no. 8965.
How to remain aware about whether or not you qualify for an exemption?
Majority of the consumers who can afford to pay for a health insurance coverage but who chose not to purchase one would be liable to pay for a penalty. But there are plethora of reasons for which a person should be eligible for a coverage exemption, for instance, financial hardship, residing overseas or having a gross income which is below the level that is needed to file your income tax return.
Is it possible now to sign up for insurance in order to avert the penalty?
Well, the deadline for 2014 has already been completed and hence if you didn’t sign up for health insurance coverage, you might be applicable for the penalty. There was also a special enrollment time for 2015 coverage for those people who were not aware of this or those who couldn’t get in terms to the deal.
Therefore, if you still don’t have health insurance coverage and you have the ability to keep one such coverage, you’re in for trouble from Uncle Sam. Wait to be penalized and be prepared to waste some of your dollars.