While some people cannot help but see the tax season as a very stressful period, there is no reason for this to be so. If you have a Health Insurance Marketplace plan, you don’t need to trouble yourself.
Do you want to have an insurance plan through the Health Insurance Marketplace next year? This guide will provide you with all the relevant information you need with respect to filing your taxes.
Does your tax return require you to show proof of health insurance?
The individual requirement of the Affordable Care Act was phased out in 2019. As a result, when you file your tax return, there is no need for you to provide proof of health insurance coverage to the IRS.
When you file your taxes, regardless of how you received your health insurance, you will get documentation in the mail about it. This should come either from the Marketplace or your employer.
Have you been able to save money on your health insurance because you bought it at the Marketplace? That’s why you’ll need to fill out a few forms to keep your health insurance costs low. Additionally, you will require Form 1095-A, which you can obtain from here.
Documentation Required for Marketplace Insurance Plans that Qualify for Premium Tax Credits
It is necessary to file particular paperwork with your federal income tax return if any member of your family has Marketplace insurance for which you have received Premium Tax Credits.
People who are on the Marketplace can get tax credits (premium) and use them to help pay for their health care. If so, were you eligible for premium tax credits? Once you’ve completed your tax return, you’ll need to file Form 8962. This section must be completed using Form 1095-A, which summarizes the coverage offered by your health insurance.
By the start of 2020, Marketplace plan participants should have received their Form 1095-As. Customers who have signed up for health insurance with Skyline Insurance can browse their accounts to download their 1095-A tax form. Were you able to sign up? Have you registered for health insurance via the HealthCare.gov platform? In that case, it lets you obtain your Form 1095-A by clicking on the link below. The best course of action is to wait until you receive this documentation before you start filing your taxes. Use this form to reconcile your premium tax credits for the year 2019.
Documentation Required for Marketplace Insurance Plans Without Premium Tax Credits
Were you unable to take advantage of tax credits for your health insurance plan in 2019? Yo u must also watch out for your Form 1095-A. You should be able to get this from the mail shortly after filing your tax return. Your first order of business should be filling out your Form 8962 in combination with your Form 1095-A.
If this is the case, it is possible that you will be eligible for federal tax credits.
Wait until you receive your 1095-A before making any decisions about your 2019 insurance rates, regardless of whether there is an entitlement for you to receive premium tax credits. Following that, you may begin preparing and filing your tax returns.
Wait until you receive your 1095-A before making any decisions about your 2019 insurance rates, regardless of whether there is an entitlement for you to receive premium tax credits. Following that, you may begin preparing and filing your tax returns.
For the purpose of reconciling premium tax credits, use Form 8962. The requirement for advance payment reconciliation is combined with the requirement for a late return. If you do this, you will help to avoid a delay in the processing of your refund and will prevent it from having an impact on future credit payments.
If I Sign Up for a Marketplace Plan, Can I Look Forward to Receiving a Tax Refund?
Do you have a plan from the ObamaCare Marketplace that you use? So, if that’s the case, you might be able to get money back from the government. However, there are a lot of things that could change this.
If you qualify for premium tax credits and opt to have them applied to your premiums each month, you may reconcile them on Form 8962 using the information on Form 1095-A. If this number is less than your premium tax credit, your refund will be greater or smaller. If the tax credits for your premiums exceed the credit, you should cover the difference with your current year taxes.
If you have a Marketplace insurance plan, you must complete Form 8962 to determine whether you will receive a refund or whether you will owe additional taxes.
If you qualify for the premium tax credit, you can claim it on your 2019 tax return. Although it’s conceivable that you would have qualified for tax credits under the Marketplace plan in which you are enrolled, it’s also possible that you choose not to include them in your 2019 tax rates. The information on Form 8962 must be filled in accordance with the date on your Form 1095-A, which you obtained from the Online Marketplace.
How Does an HSA Affect Your Taxes?
Pre-tax funds can be set aside in an HSA for a variety of legitimate medical expenses. At any time, you can make tax-deductible contributions to an HSA. There is no tax on your earnings if you invest them.
A health savings account (HSA) can be opened by anybody with a high-deductible health plan that qualifies, including those with coverage via the marketplace (HSA). Preventive care treatments are commonly covered by high-deductible health plans before the deductible is attained. It is possible to find HSA-eligible plans on the Marketplace by utilizing the Lively platform, and if you pick one, you may set up an HSA using the Lively platform.
An insurance policy is classified as high-deductible in 2019 if an individual’s or family’s deductible is greater than $1350 or $2700, respectively. You have until April 15, 2020, to contribute to an HSA if you have an HSA-eligible plan for 2019 and you can contribute up to $3,500 per year for individuals and $7,000 per year for families.
This type of funding can be used to pay for copayments, deductibles, and coinsurances that insurance plans typically would not cover. Other medical expenses that insurance products normally would not cover can also be covered by health savings accounts (HSAs). The HSA works to your advantage, especially if your health insurance plan has a high deductible. These accounts are tax-free, and therefore will save you money. This is because people can pay for health care with pre-tax dollars and a high deductible plan.
In most cases, you won’t be able to use your HSA money to cover your monthly health insurance premiums.
HSA Money and Account Taxes
HSA funds can never be withdrawn or used for anything other than the original purpose for which they were set up. Despite the fact that your high-deductible health plan may have come to an end, your HSA may continue to grow and provide you with benefits even after that time period has passed. Pre-tax income deposited in an HSA, like those saved in a 401k, can be used on investment and allowed to grow, free from being taxed.
Money deposited in a health savings account is yours in perpetuity. Additionally, if you are not anymore signed up for a high-deductible health plan, you can still continue the use of your HSA. HSAs are comparable to 401ks in that they allow investors to invest their money and grow it, tax-deferred.
If you want to use the money in your HSA for qualified medical expenses, the funds will remain tax-free.
Money utilized for other purposes, on the other hand, constitutes taxable income and is subject to taxes for anyone under the age of 65. If you use your HSA money for medical expenses that aren’t covered by insurance, you’ll have to pay an additional 20% tax.
