Will Obamacare Complicate Your Taxes? Not Likely

Photo (cc) by 401(K) 2013

We’ve been talking about it for years, but this is the year the Affordable Care Act finally shows up on your tax return. The health insurance mandate imposed by Obamacare was implemented last year, and now it’s time to pay the piper if you didn’t sign up for coverage.

Even if you have health insurance, you’ll have an extra step or two to complete on your tax return this year. Money Talks News finance expert Stacy Johnson explains more in this video. See what Stacy has to say, and then read on for the details.

Insurance comes from Uncle Sam, your boss or your wallet? Check a box.

We’ll start with the scenario that applies to the vast majority of Americans. Do you get your health insurance in any of these ways?

  • Workplace benefit
  • Medicaid
  • Medicare
  • Other government source such as the VA or military benefits
  • Individual policy purchased on your own (i.e. no government subsidy)

If you’re in any of these categories, all you need to do is check a box on line 61 of the 1040 form saying you had health insurance. That’s it. You’re done.

So for most people, Obamacare doesn’t complicate matters much, if at all. Yet publications like Forbes put knots in people’s stomachs by publishing recent articles like Think Filing Taxes Was Tough Before Obamacare? Just Wait.

Government helped cover your premium? Fill out a form.

That only leaves two groups of people: those who received government subsidies to help them buy health insurance, and those who did not have health insurance at all for some period during the year. While in the minority, this group still encompasses millions.

Let’s talk next about those who received a subsidy.

First, you should be on the lookout for Form 1095-A to arrive in the mail. You should also be able to download it from your Health Insurance Marketplace account, if you have one. In case you’ve forgotten, that account can be found at HealthCare.gov, and you’ll find the form in the “Messages” section of your account.Then, when you do your taxes, you’ll need to fill in Form 8962. Admittedly, if the 1040 form scares you, Form 8962 will appear terrifying. It has lots of boxes and plenty of calculations that are sure to have you chewing your pencil down to a nub.

Never fear. Online software programs such as TurboTax, TaxACT and H&R Block will walk you through questions that make it so easy to complete the form you may not even realize you’re doing it. If you can’t imagine doing your taxes online, check out this article for suggestions on how to find some free face-to-face tax prep.

If your 2014 income was higher than expected, you may find your subsidy was greater than it should have been, and you may have to pay a portion back. If not, you simply attach the form to your tax return, and submit it along with your 1040.

Didn’t get health insurance? That will be $95 please.

Finally, we come to those of you who, for whatever reason, didn’t have health insurance last year. If you’re in this category, get ready to pay the price.

The tax penalty for not having coverage in 2014 is the greater of $95 per adult and $47.50 per child (maximum of $285 per family) or 1 percent of your household income above the filing threshold, which is about $10,000 for a single individual.

If you do have to pay the tax, you’ll enter it on line 61 of your 1040 form.

However, before you automatically pay the fee, make sure you aren’t exempt. The law allows certain individuals, such as those for whom buying health insurance is a financial burden or those with religious objections, to go without coverage and without penalty. You can find a list of exemptions and how to apply on the government health care website.

What’ll it be for you? Check a box, fill out a form or pay a penalty? If you feel like sharing, do so in the comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Small Appliances You Don’t Need — and What to Use Instead
7 Small Appliances You Don’t Need — and What to Use Instead

Here’s how to get the job done without blowing money — or losing counter space.

8 Ways to Snag Extra Savings at Walmart
8 Ways to Snag Extra Savings at Walmart

Are you aware of all these ways to boost your savings in Walmart stores and at Walmart.com?

10 Ways to Nail Savings on Your Remodeling Project
10 Ways to Nail Savings on Your Remodeling Project

Here’s how to save on your next remodeling project with discounted materials and more tips and tricks.

6 Reasons Hiding Cash at Home Is a Terrible Idea
6 Reasons Hiding Cash at Home Is a Terrible Idea

Stashing cash around the house is anything but harmless.

3 Good Things About Recessions
3 Good Things About Recessions

We don’t wish difficulty on anyone, but there can be an upside to a down cycle.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

10 Things You Should Never Do With Bleach
10 Things You Should Never Do With Bleach

Does the pandemic have you reaching for bleach more than ever before? Learn the ins and outs of using this powerful disinfectant.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.