Here's How To Show Proof Of Health Insurance, Because Filing Taxes Is Confusing AF
I know a lot of us think it's a myth at this point, but health care is a thing — and you're required to have it in the United States. The government is going to check your coverage on your tax return, so if you haven't filed already, you might be wondering: How do I show proof of health insurance? Well, this handy-dandy guide is here to help.
Under the Affordable Care Act (ACA), Americans who don't have heath insurance coverage are hit with a penalty fee, which is why the Internal Revenue Service (IRS) wants to know your status. And yes, you still have to do this to file in 2019 — although the ACA's individual mandate was repealed in the Tax Cuts and Jobs Act in 2017, the repeal doesn't go into effect until 2019, for the taxes you file in 2020. However, according to the IRS website, you're not required to actually send the IRS any forms when filing your taxes, so take a deep breath. But it does say that it's a good idea to have certain documents on-hand, such as 1095 forms, which confirm your health insurance coverage.
There are three of those to know about. The first is the 1095-A form, which is sent to individuals who are insured through marketplaces. According to TurboTax, the document lists information about your policy, the cost you pay for insurance, any advance payments from premium tax credits and dependents who are covered under your insurance. The second is the 1095-B, which is a form "used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and therefore are not liable for the individual shared responsibility payment," per the IRS website. And then the third is the 1095-C, which is used by employers who use “self-insured coverage,” about who was covered and when. You can get more information on the forms here.
The site also recommends that you keep W-2's or any other payroll statements that show health care reductions close by. You can get more information on that here.
It should all be easy-peasy from there (especially if you're e-filing)!
Not to rush you or anything, but it'd probably be a good idea to get this done as soon as you can. If you didn't know, the tax deadline is inching closer (April 15) and if you don't file in time, you could be penalized.
There's this thing called a failure-to-file penalty, which deducts a minimum of 5 percent of what you might owe, and up to a 25 percent maximum of what you owe. Even worse is the fact that the rates could go up the longer you wait to submit your taxes. For example, if you still haven't filed more than 60 days after the deadline, the charges will either increase to a $135 fee or 100 percent of the taxes you owe, according to Yahoo! Finance. With just over five weeks remaining until the deadline, you might not want to sleep on the process.
If you're dealing with a situation preventing you from filing, though, you can submit a Form 4868: Application for Automatic Extension of Time To File, which will give you an extra six months to submit your taxes, You've just gotta make sure the form is postmarked on or before April 15 to get the extension.
Once you've started the process, you'll likely realize that it isn't nearly as hard as it may seem. But if you discover otherwise, remember that there are plenty of places out there that can help you on this tax journey, from H&R Block to Turbo Tax.
Now go on and get to it! Happy filing!