Individuals must provide health insurance for themselves and their dependents.

Forms 1095-A, 1095-B, and 1095-C contain important information that may have to be included on your return.

Bundling your medical coverage with an HSA (Health Savings Account) is often the most efficient way to organize coverage.

Self employed individuals may deduct 100% of the cost of their health insurance premiums from adjusted gross income. HSA contributions are also deductible up to certain contribution limits.

Purchasing coverage through your employer will usually result in your share of premiums being paid on a "pre-tax" basis, which is a real money saver.

Individuals (not self-employed) who buy coverage in the private marketplace or through an exchange will deduct premiums on Schedule A (subject to a 10% threshold) and probably not yield much of a tax benefit from the deduction. HSA contributions will be deductible as an adjustment to income.

Failure to carry coverage involves a penalty which can be substantial. Exceptions to the penalty may apply. Skyrocketing premiums could translate into penalty relief for many taxpayers who decide not to buy coverage because they can't afford it. If the lowest cost plan available exceeds 8% of your income, the penalty may not apply. 

Anyone receiving a "premium subsidy" will reconcile that subsidy when they file their tax return. The health insurance exchange will issue a Form 1095-A which is needed to make this reconciliation. Based on the outcome of this reconciliation, a refund or balance due may result on the 1040.

Todd's Tax Service LLC

The Affordable Care Act and related regulations cover 10,535 pages.

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