Despite uncertainty, enrolling in health insurance remains the surest way to avoid penalties
KANSAS CITY, Mo., Oct. 30, 2017 (GLOBE NEWSWIRE) -- Amid recent governmental decisions concerning healthcare, H&R Block (NYSE:HRB) advises taxpayers they can avoid Affordable Care Act penalties on their 2018 tax returns filed in the 2019 tax season by obtaining qualifying health insurance for 2018. Taxpayers can enroll in the federal marketplace, which begins its open enrollment period November 1 and ends December 15.
“The penalty for being without insurance has become more and more expensive since first implemented in 2014,” said Kathy Pickering, vice president of regulatory affairs and executive director of The Tax Institute at H&R Block. “While there are dozens of exemptions that can decrease or wipe out the penalty, the surest way to avoid the penalty is to get qualifying insurance coverage.”
Federal marketplace open enrollment period begins November 1
To select a 2018 health insurance plan on the federal marketplace starting November 1, taxpayers can visit www.healthcare.gov. They will need their personal and household information, including Social Security numbers, addresses, immigration document information, tax filing status, employer information and estimated household income for 2018.
“Estimating your household income for the upcoming year is very important for getting the right amount of the premium tax credit to make health insurance coverage more affordable. Underestimating your income could mean you get too much tax credit and you could end up owing money the next time you file your taxes. Overestimating your income could increase your monthly insurance premiums until you can file your 2018 tax return,” said Pickering.
Other ways to avoid the penalty for being without insurance
Taxpayers can qualify for an exemption to the penalty, which can apply either to the whole year or to specific months. Exemptions are granted based on income, hardships, health coverage status and other circumstances or affiliations. Taxpayers can estimate the size of any penalty they may owe and see if they may qualify for an exemption by using an ACA tax calculator.
“Taxpayers shouldn’t let a potential penalty prevent them from filing a tax return. A qualified tax professional may be able to help them identify and apply for an exemption,” said Pickering. “Additionally, a million taxpayers leave approximately $1 billion on the table every year by neglecting to file a return. Even if you owe a penalty, you might still get a refund if your withholdings were greater than your tax liability and penalty.”
Filing a silent return won’t help taxpayers avoid a penalty, but could trigger an IRS notice
Last year, the IRS announced it would accept “silent returns”: tax returns that did not state if the taxpayer had insurance coverage, qualified for an exemption or included a shared responsibility penalty. Taxpayers may have thought they could avoid the penalty by filing a silent return, but instead they opened themselves up to IRS correspondence.
This year, the IRS has announced it will not accept silent returns for 2017 tax returns filed in 2018. In any case, a silent return will not offer protection from a penalty for being without insurance.
For help understanding the tax impact of their health insurance coverage status, taxpayers can call 1-800-HRBLOCK or visit a local H&R Block office.
About H&R Block
H&R Block, Inc. (NYSE: HRB) is a global consumer tax services provider. Tax return preparation services are provided by professional tax preparers in approximately 12,000 company-owned and franchise retail tax offices worldwide, and through H&R Blocktax software products for the DIY consumer. H&R Block also offers adjacent Tax Plus products and services. In fiscal 2017, H&R Block had annual revenues of over $3 billion with 23 million tax returns prepared worldwide. For more information, visit the H&R Block Newsroom.
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Source: HRB Tax Group, Inc.