Some people can’t stop themselves from seeing the outset of tax season as an extremely stressful time, although there is no need for anyone to feel like this. If you have a health insurance plan via the Health Insurance Marketplace, there is absolutely no reason for you to get worried.
Would you consider obtaining a health insurance plan via the Health Insurance Marketplace in the upcoming year? We have below a useful guide about this containing all the invaluable information you need to understand how to file your taxes.
Do you need to show proof of health insurance when filing your taxes?
From 2019 on, the individual mandate of the Affordable Care Act will no longer be in place. This is the reason why now you don’t have to show the IRS any proof that you have health insurance when you file your tax return.
Your proper tax records will come to you in the mail from your employer or you’d get it via the Marketplace after filing your taxes. You will receive them regardless of how you were able to obtain your health insurance.
Would you be interested in knowing if you have received subsidies (savings on health insurance) through the Marketplace? In that case, you need to keep your health insurance savings and accomplish filling out a handful of paperwork. For this, you will need Form 1095-A, which you can obtain from here.
Documentation Required for Marketplace Insurance Plans with Premium Tax Credits
If you or any member of your family has purchased Marketplace insurance for which you received premium tax credits, you are required to include certain documents to come with your federal income tax return.
Can you take advantage of the tax credits (premium) associated with a Marketplace plan? Did you qualify for premium tax credits if that is the case? Did you qualify for premium tax credits if that is the case? After you have completed your tax return, you will need to file Form 8962. To complete this section, you must use Form 1095-A, which provides information about your health insurance coverage.
Even though you can only register for health insurance through the Marketplace, Skyline Insurance customers can access their accounts and get their 1095-A tax forms. How did your HealthCare.gov experience go? By clicking on the link below you will be able to access your Form 1095-A. Hold off on filing your taxes until you have Form 1095-A with you. The purpose of this form is to reconcile your premium tax credits for the calendar year 2019. There will be exceptions to this limit that occur yearly during the Open Enrollment Period. A Qualifying Life Event, such as relocating or changing your primary address, may qualify you to enroll in insurance during a Special Enrollment Period. Additionally, it might be prolonged, but only for a short period.
Documentation Requirements for Marketplace Insurance Plans Minus the Premium Tax Credits
Your health insurance credits didn’t work out for you in 2019? Form 1095-A, which is sent by mail, is also important. Make sure you keep track of it! Ensure that you fill out both forms together, form 8962 and 1095-A.
After all, you were eligible for a premium tax credit, but you didn’t get one. If this situation describes your current circumstance, it may well be possible that you can get federal tax credits from the federal government.
People who want tax credits for their insurance premiums in 2019 should wait until they have their 1095-A to see if they can get them. After that, you can start filling out your tax forms.
Form 8962 can be taken advantage of to reconcile premium tax credits. An advance payment reconciliation is essential whenever a late return happens. By doing so, you may avoid any delays in receiving your refund and avoid any impact on future credit payments.
Are Tax Refunds a Good Possibility if I Sign Up for a Marketplace Plan?
Are you currently enrolled in a plan offered via the ObamaCare Marketplace? Therefore, if this is the case, you may be eligible for a refund from the government. This, however, is subject to change due to a variety of factors.
Using the information on Form 1095-A, you can determine if you are eligible for tax credits for premiums and if they apply to your monthly premiums. The form to use for this is Form 8962. If this figure is way below your premium tax credit, the refund you will get could be larger or smaller than expected. The difference between the tax credits given to your premiums and the tax credit is the amount you must pay on your taxes this year.
For people who do get their health care through the Marketplace, they need to fill out Form 8962. This form tells them whether they’ll get money back or if they owe more money.
If you are eligible for the premium tax credit, you can claim it on your 2019 tax return. Tax credits may be available to you depending on the Marketplace plan you’re in. Alternatively, you can choose to have them removed from your 2019 rates. You must fill out Form 8962 according to the date on your Form 1095-A, which you received from the Marketplace.
What Happens to My Taxes if I Have a Health Savings Account?
HSA, How Do They Work?
A health savings account (HSA) is a type of savings account that lets you invest pre-tax funds for a wide range of medical-related bills. You may contribute to an HSA at any time before or after-tax. The profits earned will be completely tax-free if you invest them.
An HSA is tax-free savings account that individuals with qualifying high-deductible health plans, such as Marketplace coverage, can use to pay for healthcare. Before the deductible was met, high-deductible insurance generally only covered preventive care. You may want to check out and explore what HSA-eligible options can be found on the Marketplace and utilize the Lively platform
Tax-deductible plans are those that have an individual deductible of at least $1350 or a family deductible of at least $2700, for tax purposes. The maximum amount an employee can contribute to an HSA under an HSA-eligible plan in 2019 is $3,500 for an individual and $7,500 for a family. You must submit contributions by April 15, 2020, if you had an HSA-eligible plan in 2019.
An HSA permits you to save for copayments, deductibles, coinsurance, deductibles, and other healthcare costs that are not typically covered by insurance plans. HSAs are particularly useful if you have a high deductible health insurance plan because they do not require tax withholding. In other words, people may use pre-tax money and a high-deductible plan to pay for health care.
If you have a health savings account, you cannot use it to pay your monthly health insurance costs.
HSA Money and Taxes
You can never withdraw or use HSA funds for anything other than the purpose for which they were set up. The HSA you created during your high-deductible health plan will grow continuously and benefit you long after the plan has ended. An HSA works the same way as a 401k, allowing tax-free growth of pre-tax earnings.
Your health savings account money is yours to keep forever. Even if you no longer have a high-deductible health plan, you may still utilize your Health Savings Account (HSA). HSAs, like 401(k)s, let investors put their money to work while deferring taxes.
Your HSA funds will not be subject to taxation if you use them for qualified medical expenses.
People under 65, however, are subject to taxation if they use the money for anything else except tax-exempt purposes. If you use your HSA funds to pay for medical costs not covered by your insurance, you will be taxed 20% more.
