I’ve been using TurboTax for the last 7 years, with the exception of one year that I used another service and quickly came back to TurboTax the following year. Filing taxes is never a picnic in the park – the price, the time, the terminology and all the paperwork. But I love that TurboTax has always made it easier, from walking me through each step to telling me exactly what line of a form I will find the necessary information. They are proving to be even more helpful this year with the new new health care law potentially affecting tax rates. The Affordable Care Act (ACA) or Obamacare is designed to ensure everyone has health insurance and imposes tax penalties on those who don’t. Since 2014 is the first year all Americans are required to maintain health insurance,we will be reporting it on our taxes in 2015.
The new requirement to report health care on your taxes does NOT mean we need to pay extra for a tax preparer. In fact, for most Americans, the ACA will affect our taxes minimally: most Americans will only need to check a box. TurboTax has been simplifying the federal tax code for the past 30 years and has done the same with the ACA.
With software like TurboTax, you’re never need to worry about the ACA forms. Instead TurboTax will ask you a series of questions and then fill in the forms for you based on your answers. They have already done the work for you. For most people (9 out of 10 taxpayers), complying with the ACA on taxes takes checking a box on their tax return to confirm they have health insurance.
Taxpayers fall into three categories concerning the ACA: insured through an employer, insured through health care exchanges, and those uninsured.
- For most people (9 out of 10 taxpayers), complying with the ACA on taxes is a non-event because they have insurance through their employer, Medicaid, Medicare, or a private provider (Congressional Budget Office). They will just check a box on their tax return to confirm they have health insurance. There’s no need to spend more on tax preparation.
Insured through Exchanges:
- This year 8 million people became insured through healthcare.gov or their state exchange (Congressional Budget Office)
- Those who purchased insurance through the exchanges will receive a 1095-A form from healthcare.gov or their state exchange. They will enter information from their 1095-A on their taxes, just like they do with their W-2 forms.
- Roughly 42 million people are uninsured in America (Congressional Budget Office).Those who do not have insurance and don’t qualify for exemptions will pay a penalty of about $95 or about 1% of their income.
- If you’re currently uninsured, think about buying insurance this year during open enrollment. Open Enrollment for the health cafe exchanges starts on November 15 and ends February 15, 2015
- TurboTax has a free calculator to estimate how much your penalty may be for 2014. The health care penalty is based on your family size and income. You can find the free calculator at TurboTax Health.
It’s important to know that about half of all uninsured Americans can qualify for an exemption for any numbers of reasons, like not meeting the minimum income requirement. TurboTax can help you avoid paying unnecessary penalties by offering free tools to help you understand if you might qualify for an exemption.
If you fall into any of these categories, or if you aren’t sure which category, TurboTax can help you figure it out in just a few easy steps. If you would like to learn more about health care and your taxes ahead of time, you can check out TurboTax Health for tools and information.
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.
28 thoughts on “Learn How the Affordable Care Act Affects Tax Preparation in 2015”
Thank goodness for TurboTax. I’m not sure if anyone can do their own taxes these days. Everything is getting so complicated.
Ughhh! I really would rather wait till next year to think about this. Lol. But thanks for the great information. Can’t avoid taxes right?
That reminds me the tax season is coming. I didn’t even think about how new insurance would effect tax.