Your Healthcare and Taxes

As we approach the tax season, we can forget to include healthcare information. If you were without insurance of any sort throughout the year, then you may owe a penalty. If you did not have any credits this year and made above the average household income your penalties might eat into your return or leave you owing money. The different types of insurance are government, employee supplied, and individual purchased healthcare plans.

Here are some things to keep in mind as you prepare your taxes.

  • You may automatically have received employee healthcare with your company. Read your employee contract and discuss with a manager or human resources to see if you automatically received coverage in your offer.
  • If you recently moved out of state, then you might still have coverage in the state you moved from even if you found a provider in your new state of residence.
  • If you did not receive healthcare throughout the whole year but were part of the healthcare marketplace, you may also be able to avoid the penalty.
  • Check other insurance policies to see if they came in a bundle with family health insurance.
  • If you can prove hardship or loss of employee insurance, you may be able to get an exemption.
  • Some employers will allow you to keep your health insurance up to a certain period after your position is terminated. Check to see if you had insurance over that period.

Most of these concerns can be answered by a professional tax preparer or accountant. Any exemptions available can be found on irs.gov. The exemptions can change from year to year. If you are worried that you might owe a penalty. The easiest way to ensure you can avoid the penalty is to sign up for private healthcare or healthcare through an employer. If you cannot afford these options, then seek out a government agency or sign up on the healthcare marketplace. This way you at least have the option to qualify for an exemption and possibly avoid the penalties. The IRS may require you to provide proof of insurance, but most of the time all you will need is to provide your tax professional with your information.