April has arrived – thank goodness! That means it’s time to address some more of the biggest tax issues of 2015! At the top of that list is the end of the official Open Enrollment Period for health insurance and the tax penalties that can arise when a taxpayer has failed to properly enroll on time.

Next year’s penalty for unenrolled folks is even stiffer than this year’s…. almost twice as stiff, in fact. If you don’t have coverage in 2015, you may be assessed a minimum penalty of $325 OR 2% of your annual income. The IRS will request whichever is higher, of course. In 2016, this penalty will increase even further to $695 or 2.5% of your annual income and the penalty will be adjusted for inflation each year after that.

Fortunately, there are exceptions to the penalty. Those that can’t afford health insurance can file for an exemption. Plus, healthcare law prohibits the IRS from coming after you for payment like they can for other tax liabilities. The smartest way to avoid a penalty, however, is to apply for a Special Enrollment Period and get some insurance! Even if paying for insurance costs you more than the potential tax penalty would, you’ll be glad you got it whenever you need to go see a doctor this year. In most cases, our new national health insurance laws actually make obtaining insurance a lot easier, particularly for those individuals that are self-employed.

So Open Enrollment ended in February but the Tax Season Special Enrollment Period (yep, a whole period just for Tax Season!) opened on March 15 and will last all through April. Healthcare.gov defines the special enrollment period as a time outside of the open enrollment period during which you and your family have a right to sign up for health coverage. Normally to qualify for a special period, you need to have experienced a major life-changing event like a change in family status (for example, marriage or birth of a child), a loss of job-based health coverage or something along those lines. To qualify for the (not so openly advertised) Tax Season Special Enrollment Period clients don’t need to be newlywed or newly unemployed. They simply must meet the below criteria:

  1. You didn’t know until after Open Enrollment ended on February 15, 2015 that the health care law required you and your household to have health coverage, or you didn’t understand how the requirement would impact you and your household.
  2. You still owe the fee for not having coverage in 2014.
  3. You are not already enrolled in 2015 coverage through the Health Insurance Marketplace.

If these apply to you, you can easily enroll in a 2015 plan before April 30, 2015! If you’re still afraid of getting hit with an insurance-related penalty even with this newfound, heiress-approved knowledge, I can help! Contact the Tax Heiress Office today!

Smooches,

Buffie the Tax Heiress