Taxes are a pain. Health insurance is a pain. This year, Americans will suffer both when they file their income taxes. Ouch.
The Affordable Care Act, aka Obamacare, inserted health insurance into tax season in two ways, affecting nearly all of us. The first is the law’s mandate that almost all U.S. residents get health coverage or pay a penalty. The second is the tax-credit subsidy millions of Americans received via Obamacare’s exchanges to lower their health insurance premiums.
Oh, and there are new IRS forms, too.
“The ACA has made health care a tax issue and, in that sense, everyone will see an impact on their tax return this year,” said Kathy Pickering, the executive director of The Tax Institute at H&R Block. “It may potentially impact their refund.”
Before you freak out, rest assured that little has changed for about 80 percent of Americans. Still, some people will have to jump through new hoops — and might see big effects on their tax refunds or bills.
It’s easy enough to figure out which camp you fall into. Here’s what each group of Americans will have to do:
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You can file your taxes and claim those exemptions while waiting for your exchange to tell you whether you’re exempt. If it says no, then you can sort that out with the IRS later.
I Need Help!
About that. The IRS telephone hotline will probably be a nightmare this year, in large part because of budget cuts. And the exchanges’ help lines will be pretty tied up through Feb. 15, when Obamacare enrollment for this year ends. There are other options, thankfully, but hurry to seek assistance so you’re not last in line as April 15 approaches.
Companies such as H&R Block and accountants in your area will do your taxes with you, for a price. There are online applications such as Intuit TurboTax that also charge money. Some of these companies offer some free assistance as promotions for their paid services.
If you make less than $60,000 a year, you can use the IRS’ Free File option, but you’ll still have to do a lot of math yourself. If you make less than $53,000 a year, you can take advantage of tax preparers participating in the IRS’ free Volunteer Income Tax Assistance program. The IRS’ Tax Counseling for the Elderly program is available at no charge to people 60 and older. And Enroll America will offer no-cost local help using Intuit TurboTax.
