The Affordable Care Act [health care reform] is the biggest change to the federal tax code in the past 20 years and impacts almost every taxpayer, but many are unaware of its implications. H&R Block provides its clients with a free personalized review of how the health care law would directly impact them.
A survey conducted by the Tax Institute at H&R Block found that three out of four taxpayers do not know the guidelines for health insurance eligibility under the new law. In addition, 45 percent of Hispanic respondents were not aware of a possible tax penalty, if they do not have health insurance.
The law, which was passed two years ago and upheld by the U.S. Supreme Court last summer, mandates that most individuals have health insurance by 2014 or pay a penalty via their tax return. Those who qualify could be eligible for government assistance to help pay their insurance premium.
“There certainly is an intersection of health care and taxes,” said Joanna Castillo, tax professional with H&R Block. “This tax season will be one of historical significance – both in terms of understanding what credits and deductions remain in the new tax laws, as well as how health care reform will impact taxes. This is not the year to go do it alone.”
Taxpayers to receive personalized healthcare and tax review
According to the Tax Institute at H&R Block, 77 percent of consumers were unaware their 2012 tax return can be used to determine eligibility for health care benefits. Based on information from the tax return, H&R Block will provide information to clients showing if they qualify for a subsidy and how much they can expect to pay out of pocket for the monthly premium. Also, it will detail the possible penalty clients would pay if they do not obtain health insurance.
• A family of four earning approximately 90,000 dollars could be eligible for some government assistance paying for health insurance.
• A married couple with two minor children and income of 40,000 dollars would owe approximately 170 dollars a month for insurance and be eligible for government assistance. If they choose not to obtain insurance their penalty would be 285 dollars for 2014 and 975 dollars for 2015. New tax consequences also emerge from health care law Beginning with the 2012 tax return, those with health insurance through their employer may notice additional data on their W-2 detailing the cost of their employer-provided insurance. That information is for informational purposes only to help individuals understand the true cost of health insurance, but is not a taxable benefit to employees. Take a test drive through health care reform New for this tax season, H&R Block has launched a website – www.hrblock.com/healthcare. The site is designed to educate consumers on the basics of the law and provide real-life examples of the impact on various taxpayers. This user-driven experience enables the taxpayer to get a sense of the impact of the law through examples of four different taxpayers based on where they live, their family size, income and current health care insurance status.