Did You Forgo Health Insurance, You May Receive a Tax Penalty

If you decided to skip health insurance this year, consider this: Unless you can prove you have a valid excuse, you will be liable for a penalty during the coming tax season — and the time to start making your case is now.

That’s not all. People who bought subsidized insurance through one of the marketplaces may have new tax forms to complete, while paying the penalty itself may demand some serious number-crunching.

The Internal Revenue Service is gearing up to answer questions, but it warns that only half of the callers may get through — and those who succeed may have to wait a half-hour or more.

“There are quite a number of moving parts that taxpayers have not had to deal with,” said Kristin Esposito, technical tax manager for the American Institute of Certified Public Accountants.

The Obama administration’s Affordable Care Act — including its penalty provision — is in effect for the first time this year and will be reconciled through a person’s tax return.

For most taxpayers, this will simply mean checking a box on a tax return indicating they had insurance for the full year. But millions of others will have to grapple with new tax forms and calculations that may generate unexpected results.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary