Tax season is fast approaching – are you prepared?
Do you have all of your health insurance documents lined up for your taxes?
Are you sure you know exactly what you need to file your taxes if you have health insurance through the health care market place?
Filing taxes is already a stressful process for most people. Keeping the lingo straight and knowing what documents you need to have to file your taxes can be a challenge.
When you have health insurance through the market place, you have an added duty of having to report your income and file the right information on your tax return.
This blog will cover everything you need to know about the health insurance market place, IRS, and the tax season. You’ll also get tips for getting prepared for the health insurance market place, IRS, and the tax season.
Tax Season, the Health Insurance Market Place, and the IRS
Regardless of when your health coverage started in 2020, you’ll need to include your health insurance information in your tax return when you file.
If you don’t do this, you could be assessed penalties, so make sure you have everything together before you get ready to do your taxes.
Most health insurance tax forms are mailed out by mid-February, so it’s best to wait to do your taxes until after that – you’ll need all of your tax forms to file your taxes correctly.
For people who have used the health care market place portal to file their application, tax information may be available online before forms are mailed out.
Keep reading to find out exactly what forms you can expect to receive, what forms you may need to complete, and what to do if you didn’t have coverage or it expired during the year.
What You Need to Know About the Health Insurance Market Place and the IRS
To make it a little easier for you to get through tax season, here is what you need to know about the health care market place and the IRS.
1. Tax Forms You May Need
There are potentially two tax forms you may need if you had health insurance through the market place during 2020. Everyone who had coverage during 2020 will receive a Form 1095-A. This includes plan and premium information for your household for the year.
If you received premium tax credits at any point during the year, you’ll need to complete Form 8962, Premium Tax Credit. You’ll need your Form 1095-A to complete this, and this will make sure you received the correct tax credits for the year.
2. Documents You May Need to Submit
For those who used premium tax credits during 2020 to cover a portion of their premiums, you’ll need to submit the Form 8962, Premium Tax Credit mentioned above, as well as all household income information for the year.
While you don’t have to verify your insurance coverage when filing your taxes, it’s good practice to keep that on hand in case you need it in the future. Generally, no other documentation will need to be submitted with respect to your health insurance coverage.
3. What to Do if You Didn’t Have Coverage
While there used to be a penalty for people that didn’t have health insurance coverage for the entire year, that penalty no longer applies as of 2019. If you didn’t have coverage during the year, you won’t need to worry about that when you file your taxes.
A Fiorella Insurance Agent can help you choose insurance that’s right for you.
There may, however, still be questions about your health insurance coverage when you file your taxes. And don’t forget that if you paid out of pocket for your medical expenses, you may be able to write those off. Check with a tax adviser to find out how that works.
4. What to Do if Your Coverage Expired
If you had health insurance coverage for part of the year but it lapsed for some reason, there are a couple of things you’ll need to do. You’ll still receive a Form 1095-A for the months that you did have coverage, and you’ll need to file that information when you file your taxes.
Fortunately, since the penalty for not having insurance no longer applies, you won’t have any additional tax obligations beyond filing your tax returns. And if you want to get coverage for 2021, be sure to do this before the open enrollment period ends on December 15, 2020.
Tips for Getting Prepared for the Health Insurance Market Place and the IRS
Filing your taxes doesn’t have to be a painful process. In fact, many people file their taxes at home without any trouble at all.
To make your tax season a little smoother, here are some tips for getting prepared for the health insurance market place and the IRS:
- Make a list of all tax forms you expect to receive: Include both your income, investments, and liabilities when you make this list. Check them off as you receive them.
- Figure out whether you can do this yourself or you need to hire someone: If your taxes are particularly complex, consider hiring someone to do your taxes for you.
- Put together a file for all of your tax documents: To keep everything in order, keep either a paper or a digital file of all of your tax documents. This will make filing taxes much faster.
Whether you’re planning to file your taxes online or you’re going to tax them to your tried-and-true accountant, you can use these tips to make the entire process much easier.
What to Do if You Need Help with the Health Insurance Market Place and the IRS
Even with all of the information available online, it can still be overwhelming to deal with the health insurance market place and the IRS. Fortunately, there are ways to mitigate your stress when it comes to tax season.
Consider hiring someone to do your taxes if you think it’ll be too much – you can even get help online if you decide to do them yourself. Most online tax services offer premium plans that provide tax-related advice and answers to all of your questions.
A Fiorella Insurance agent or broker can help you through the entire process.