Advice For Picking Healthcare Exemptions And How Your Taxes Are Impacted
Issues surrounding healthcare seem to be everywhere, with many employers increasing the employee portion of coverage and people looking for alternative options in light of these increases. There have also been instances where people have decided to forego coverage in order to save money, but making this choice can have serious tax implications come April 15th. The only way to avoid a tax penalty for declining healthcare coverage is if you qualify for an exemption to the requirement.
In order to avoid being penalized for failing to obtain healthcare coverage, the following advice on healthcare exemptions may be helpful:
- An exemption from coverage is available if your total household income is below a certain level. If you meet this requirement, you can claim an exemption from the requirement to obtain healthcare coverage and not suffer the tax consequences for doing so.
- Members of Native American tribes can also seek an exemption from the healthcare requirement and avoid a tax penalty.
- If you switched jobs during the year, and likely went for a period of time without healthcare coverage before finding new employment, you may qualify for a healthcare exemption regarding your taxes.
These exemptions, among others, are available to you when you file your taxes if you complete the correct forms to attach to your return. However, there are also exemptions that do not apply when filling out your tax forms, and you should consider seeking one if doing so meets your financial needs. The exemptions available outside of filing taxes are typically related to some form of hardship associated with the cost of getting insurance. In order to be granted this type of exemption, you have to fill out an application and request to be considered exempt. We can help identify if you are eligible for an exemption, determine which type of exemption you are entitled to, and make sure the exemption benefits you financially, whether at tax time or not. Picking the exemption that applies to your particular circumstances can be confusing, which is why partnering with a qualified legal tax professional is best. Call our office for a review of your situation, and learn how to minimize your tax liability and avoid penalties.