As you prepare to file taxes, health insurance is an important consideration because it can affect your tax liability. Whether you are already aware of the impact health insurance has on your taxes or are being confronted with this issue for the first time, the insurance experts at Tri-Star Insurance San Diego have put together some hints to offer you a better understanding.
Understanding the Individual Mandate
The individual mandate for health insurance means you are required to enroll in a health insurance plan if you can afford one. Should you choose not to obtain health insurance coverage, be ready to face the penalties. The fee you will be required to pay with this year’s taxes increased to $695 or 2.5 percent of your total income, whichever amount is higher.
Determining If You Are Exempt from the Individual Mandate
There are certain limited circumstances that can exempt you from the individual mandate. These typically include financial hardship, living outside of the U.S., or receiving an income below the requirements to file a tax return. Unless one of these exemptions applies to you, you should secure health insurance in San Diego to avoid paying a penalty on your taxes.
Proving Your Coverage
If your employer provides health insurance, you only have to check a box when filling out your tax forms to indicate you have coverage. If you enrolled in a Marketplace health plan, you can expect to receive a Form 1095-A through the mail showing proof of coverage.
Receiving Financial Assistance
Depending on your household income, you may have qualified for a premium tax credit. If you received a credit or other financial assistance through the Marketplace, you do not need to count this as income on your tax return. However, if you took more premium credit than you were eligible for, you may owe the difference.
Make sure you are covered with the right health insurance to avoid future penalties and to ensure you’ll receive affordable medical care if and when you need it. If you have any questions about health insurance or want information on auto, motorcycle, commercial, or home insurance in San Diego, call American Tri-Star today at 619-272-2100. One of our knowledgeable agents would be happy to assist you.