If you don’t have health insurance, it would be wise to enroll by the February 15th deadline. The penalty for not having health insurance is quite stiff in 2015. And by the way, if you received a premium subsidy in 2014, don’t spend your tax refund just yet. If you underestimated your family income for 2014, you may have to repay all or a portion of that subsidy.
Are you thinking about tax day yet? Your friendly neighborhood tax preparer is. IRS Commissioner John Koskinen declared this tax season one of the most complicated ever, and tax preparers from coast to coast are trying to get ready for the first year that the Affordable Care Act will show up on your tax form.
Sue Ellen Smith manages an H&R Block office in San Francisco, and she is expecting things to get busy soon.
“This year taxes and health care intersect in a brand new way,” Smith says.
An H&R Block office in Hartford, Conn., is decorated with cardboard cutouts from a national ad campaign on the health law’s tax implications. (Photo by Jeff Cohen/WNPR)
For most people, who get insurance through work, the change will be simple: checking a box on the tax form that says, “yes, I had health insurance all year.”
But it will be much more complex for an estimated 25 million to 30 million people who didn’t have health insurance or who bought subsidized coverage through the exchanges. To get ready, Smith and her team have been training for months, running through a range of hypothetical scenarios. One features “Ray” and “Vicky,” a fictional couple from an H&R Block flyer. Together they earn $65,000 a year, and neither has health insurance.
“The biggest misconception I hear people say is, ‘Oh the penalty’s only $95, that’s easy,’” says Smith, but the Rays and Vickys of the world are in for a surprise that will hit their refund. “In this situation, it’s almost $450.”