The upcoming tax season will be more interesting especially for those who have signed up under Obamacare (Affordable Care Act) exchanges: if you haven't obtained health insurance coverage, you may end up paying a penalty.
Under the Obamacare, almost everyone is required to get health insurance. That's why you signed up for the exchanges. In turn, you will receive a subsidy to help you pay for the premium in the hopes that you will definitely get health insurance.
But what if you didn't? Then you should be ready to cough up at least $95 per adult, but it can go as high as 1% of your income if it proves to be higher than $95. This means that the more money you earn, the bigger your penalty is.
And you really have no choice since the IRS will know. When you file your tax returns for this year, you need to indicate whether you have obtained health insurance or not. If you have tax credit, you can use it to cover for the penalty, but you will end up receiving way less or none at all. It's expected that more than 25 million taxpayers may have to pay this penalty for being uninsured in 2014.
Nevertheless, this should not drive you to panic mode. First, some people are exempted from paying the penalty, more so getting health insurance. These include taxpayers who belong to low-income families, illegal immigrants, and those who are already paying hefty insurance premiums that may make up as much as 8% of their total income.
Second, you still have time to get yourself health insurance coverage, but do note that you are given only until February 15. Those who have met certain criteria and have realized income tax balance after tax credit reconciliation may be provided with relief by the IRS for their underpayment.
