ALTOONA, Wis. (WEAU) – Taxes and health care. How do the two go together?
What you file this tax season could have an impact on how much you pay for health insurance in 2014.
Like it or not, the Affordable Care Act, better known as Obamacare is set to kick in Jan. 1 2014.
And that means everyone has to get insurance through their employer, the government, or through a health care exchange.
If you're a low income family or uninsured you may be able to get a credit from the government to help with health insurance.
But if you don't file your taxes you could miss out on that and even pay a fine.
“The tax returns seem like the same tax returns they’ve been for years but they’ve become more complex,” said Pat Sturz, a tax partner at Clifton Larson Allen LLP in Altoona.
It's important to get your 2012 tax return filed with Uncle Sam because the government will use that information to determine the amount each family will pay for health insurance if they don't already have it.
Sturz said as the health care bill comes into play, lower income earners will be provided a credit that will help pay for health insurance.
“Starting in 2014, they’re going to start receiving a 1099, which is similar to a W2. If they don’t file the return and don’t report it, the government will just assess the penalty,” Sturz said.
The penalty for not having insurance in 2014 is $95 dollars.
But in 2015 it goes up to $325 and is $695 in 2016.
That’s money that will come out of your federal tax return.
Sturz said the biggest issue in his office right now is navigating businesses though the reform.
“Is it more cost effective to basically pay a penalty and have your employees get covered under the group plan that the government is going to provide or provide health insurance on your own,” Sturz said.
He said over the next year everyone should understand how the health care reform will impact them.
“Even if you do have insurance, the one thing is it qualified insurance? It has to be meet the standard of coverage. So you need to know if your insurance provides that. If it doesn't you'll be surprised, you'll be penalized,” Sturz said.
The tax partner said the penalties may be hard to enforce because the government won't have the ability to put liens on your property.
But if you don't want to pay you may have to surrender your tax refund.