Where Taxpayers Get Tripped Up on Obamacare
NEW YORK (TheStreet) -- April 15 is just hours away, but last-minute taxpayers shouldn't panic and wind up making mistakes related to the Affordable Care Act that could haunt them next year.
The ACA's individual mandate requires adults without insurance or access to employer-sponsored health care coverage, or who qualify for Medicare or Medicaid, to have signed up for health care insurance through state or federal health care insurance exchanges by March 31. Americans who missed the deadline can't get back in the government's good graces until November, when the open enrollment period for 2015 opens up.
People who are without health care insurance for three or more months in 2014 face a penalty of either a flat fee of $95 or 1% of their gross annual household income (minus the first $10,150 for a single person or $20,300 for a married couple filing jointly).
But that's not the only tax-related concern.In fact, millions of Americans could get "stung by surprise tax bills" when they see their 2014 tax bills, says Michael Mahoney, vice president of consumer marketing at GoHealth Insurance, an online health insurance services firm. According to Mahoney, the ACA was framed, in large part, to provide subsidies to help struggling Americans afford heath care. In general, the lower your income, the fatter the subsidy for many consumers.
Mahoney: Taxpayers were able to estimate their 2014 incomes when enrolling in a health insurance plan to see if they were eligible for a tax credit, then they could apply the tax credit in advance to their monthly premium.
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