Some people can’t help it but see the coming of the tax season as the most stressful time of the year, but that doesn’t have to be the case for everyone. You shouldn’t be worried if you have a Health Insurance Marketplace plan.
Do you have a Health Insurance Marketplace plan in the coming year? Everything you need to know about submitting your taxes is included in this guide.
Are you required to provide proof of health insurance in order to file your taxes?
From 2019 onwards, the Affordable Care Act’s individual mandate will no longer be in effect. Consequently, you no longer need to show any kind of proof for your insurance coverage for health care to the IRS when you file your tax return.
You’ll receive documentation in the mail from either your employer or through the Marketplace when you file your taxes, no matter how you obtained your health insurance.
Have you benefited from subsidies (savings on health insurance) from a Marketplace plan? If that is the case, then you’ll be required to maintain your savings on health insurance by completing some documents. In addition, you’ll also require Form 1095-A. You can get that from here.
Required Documentation for Marketplace Insurance Plans with Premium Tax Credits
If any member of your family has Marketplace insurance for which you earned premium tax credits, you must file specific documents with your federal income tax return.
Have you qualified for and utilized tax credits (premium) in connection with a Marketplace plan? If such is the case, were you entitled for premium tax credits? With your tax return in place, you’ll need to submit Form 8962. Form 1095-A, which highlights the coverage provided by your health insurance, is required to be used to complete this section.
Form 1095-As for Marketplace plan subscribers should have been in the mail by the beginning of 2020. Health Scout customers who have signed up for health insurance can access their accounts and obtain their 1095-A tax form. Did you sign up for health insurance via HealthCare.gov? Then, by clicking on the link below, you may get your Form 1095-A. The prudent course of action is to delay filing your taxes until you obtain this paperwork. This form will be used to reconcile your 2019 premium tax credits.
Required Documentation for Marketplace Insurance Plans That Don’t Come with Premium Tax Credits
Did you miss out on tax credits for your insurance health plan in 2019? Aside from that, you also need to keep an eye on your Form 1095-A, which should be delivered in the mail. You should accomplish filling out your Form 8962 in conjunction with your Form 1095-A.
Despite qualifying for a premium tax credit, you didn’t receive one? It’s possible you’re entitled to federal tax credits if this is the case.
No matter if you were to get your premium tax credits or not for your 2019 insurance premiums, wait until you have your 1095-A. After that, you may start filing for your taxes.
You can work on reconciling premium tax credits using Form 8962. In conjunction with a late return, you need advance payment reconciliation. Doing so will help avoid delay in your refund and will keep it from affecting upcoming credit payments.
Should I Anticipate Receiving a Tax Refund If I Enroll in a Marketplace Plan?
Do you have an Obamacare Marketplace plan? If so, then you could be eligible for a tax refund. However, this is contingent on a variety of factors.
Tax credits for premiums can be reconciled on Form 8962 using the information you have on Form 1095-A if you qualify and choose to have them applied to your premiums each month. The refund will be larger or reduced if this figure is lesser than your premium tax credit. Should the tax credits given to your premiums exceed the credit, you will need to settle the difference with your taxes this year.
If you have a Marketplace insurance plan, you need to fill out Form 8962 to see if you’ll get a refund or if you owe extra in taxes.
The premium tax credit can be claimed on your 2019 tax return. It’s possible that you qualified for tax credits under the Marketplace plan you’re in, but you chose not to have them on your 2019 rates. Form 8962 must be completed referring to the date you have on your Form 1095-A, which you received from the Marketplace.
If You Have an HSA, What is Its Impact to My Taxes?
How Does a Health Savings Account (HSA) Work?
An HSA is a variation of savings account that lets you save pre-tax money for use on an array of legitimate medical expenses. You can contribute to an HSA before tax at any time. If you invest the earnings, they are free from taxation.
Only individuals with a qualified high-deductible health plan are eligible, including those with Marketplace insurance, are allowed to create a health savings account (HSA). Before the deductible is met, high-deductible plans usually cover primarily preventative care treatments. You may browse for HSA-eligible plans on the Marketplace and, if you pick one, you can create an HSA through the Lively platform here if you choose an HSA-eligible plan.
As of 2019, a plan is classified as a high tax-deductible expense if the deductible for an individual or family is at least $1350 or $2700. Anyone who has a plan that qualifies for an HSA can contribute up to $3,500 per year for a person or $7,000 annually per family in an HSA in 2019, and you have until April 15, 2020 to make contributions if you have an HSA-eligible plan for 2019..
A health savings account (HSA) can be used for coinsurance, deductibles, copayments, and other healthcare costs that insurance plans usually do not cover.If you have an HSA, it works to your advantage most especially if you are bothered by your high deductible health insurance by helping them save money since they are not subject to taxation. To put it another way, it’s because people may pay for health care using pre-tax cash and a high deductible plan.
HSA money cannot, in general, be used in settling your monthly health insurance premiums.
Health Savings Account Taxes and Money
HSA funds can never be withdrawn or used for any other purpose than what you put them toward. Although your high-deductible health plan may have ended, your HSA may continue to grow and benefit you long after that period has passed.. Like a 401k, pre-tax earnings placed in an HSA can be invested and allowed to grow tax-free.
You own the money you deposit into a health savings account forever. It’s also possible to continue to use your HSA even if you are no longer enrolled in a high-deductible health plan. HSAs allow investors to invest and grow their money tax-deferred, much like how 401ks work.
If you choose to utilize your HSA funds for qualified medical expenses, the funds will remain free from being taxed.
For people under 65, however, money used for other purposes becomes taxable income and is subject to taxation. Your HSA funds used for medical costs that aren’t covered by insurance will be subject to a 20% extra tax.