It is unfortunate just how many Americans do not have any form of healthcare. The truth is that most Americans do not have healthcare simply because they cannot afford it. Others just have no real motivation to acquire healthcare insurance. Due to the health care reform laws, that is something that is going to change very soon.
In fact, 2014 marks the first year that all of the major changes to the healthcare system in the United States are going to begin to take effect. When 2014 rolls around, all American tax payers are going to be required to have health insurance.
The only exceptions to this rule will include prisoners, illegal immigrants, and Native Americans. If you are not covered by Medicare or Medicaid or a plan through your job, you will be required to purchase your own medical coverage.
Tax Payers Must Report Their Health Care Plan
The IRS is going to be responsible for making sure that Americans are complying with the new health care law. In order to do this they are going to require tax payers to report their healthcare coverage plan on their taxes. Tax payers who fail to report what their coverage is are going to be required to pay a penalty
In 2014, you are going to see something new on the W-2 forms. This new number is going to be how your employer will report the value of your health care coverage to the IRS. This value is going to determine whether you quality for a tax credit or a tax penalty. Fortunately, your health care plan is not considered an income. This means that even though you will be reporting it, you do not have to report it as an income on your tax return.
The tax penalty is going to start at $95 or 1 percent of your total earned income (they go with whichever is higher) per person. This is going to slowly rise until it hits 2.5 percent or $695 by 2016. Obviously, the government understands that not everyone can afford to pay for health insurance.
You May be Eligible for a Tax Credit
If you fall into that category you may be eligible for a tax credit to help you pay for the coverage. Since taxpayers who would qualify for this assistance would fall between the income margins of $14,000 and $43,000. Families who qualify for this assistance would fall between the income margins of $29,000 and $88,000.
Your 2013 tax returns will not be affected by the new health reform laws, but it would be a good idea to start looking into your health care options sooner rather than later. Time flies and before you know it year 2016 will be here and you will find yourself having to pay a penalty of nearly $700 just because you didn't pursue healthcare coverage.
Visit TurboTax Online to find the latest information about your taxes and the new health care laws.