Ask Jillian - ACA and Taxes

Today’s post comes from Tax Pro Jillian Johnson, who you might recognize from some of our TV commercials this year.

Jillian is answering questions submitted by you, our social media fans and followers. We hope you’ll find the answers useful!

How much do you get fined for not having insurance [under the Affordable Care Act?]
—Demecca C., Jackson, MS

Demecca, the penalty amount is roughly 1% of your income or $95 per uncovered individual on your tax return, whichever is more.  This is an easy penalty to avoid. And there are tax credits and other programs that you may be eligible for, depending on your situation, that can help cover part (or all) of the cost of your coverage. Since the penalties and credits are tax matters, your local Jackson Hewitt Tax Pro can help you figure out your best option.

Due to an oversight, I had to amend my 2011 tax return this past year (2013). I had to pay an additional amount in federal and state tax for 2011. Since these additional tax payments were taxes I paid out-of-pocket, and would have paid for the 2011 tax year, can I deduct these additional amounts as taxes paid on my applicable Schedule A and Form 1040 for the 2013 tax year?
—Matt B., Raleigh, NC

Hey Matt! You can deduct any state and local income taxes you paid during 2013.  Make sure you don’t deduct any penalty and interest you paid with the taxes, just the taxes.

Hope that helps! Your local Tax Pro would be happy to help you file your return this year.  

Can you give me an idea about which plan and company I should use on the new required Obamacare [Affordable Care Act] insurance?
—Gerald P., Pensacola, FL

Hello Gerald! It sure is tough making a big decision when you don’t have all the information. My expertise is more in knowing how the Affordable Care Act affects your tax situation. If you come to Jackson Hewitt to have your taxes prepared, then we can help you apply for the tax credits.  We also make it easy for you to get help from a licensed insurance agent at GetInsured, and they can help you figure out a plan that would work for you.

Just like any other insurance plan, your living situation determines which plan you may qualify for and how much it costs.  Are you a family man? Do you smoke? Those things play a major part in health care coverage.

Thanks for all the great questions and I’ll talk to you again soon!