Affordable Care Act and Taxes for 2015

Since the Affordable Care Act took effect in 2010, the number of uninsured Americans has dropped from 18 percent to 13.4 percent at the end of the 2014 enrollment period, according to a Gallup poll. The law has had its ups-and-downs, but appears to be working the way Congress and President Barack Obama envisioned it.

Each year more provisions of the law go into effect. Not much has changed for 2015, but here are a few items you might want to be aware of.

No Health-Care Penalty

Taxes and the Affordable Care ActThe U.S. Treasury estimates that upwards of 6 million Americans will have to pay a penalty in 2015 for not having health care last year. The penalty is $95 for individuals and couples whose income does not exceed $20,000; or 0.9 percent of total income exceeding that threshold. That percentage will grow incrementally in subsequent years for taxpayers who continue to go uninsured.

Some Americans are exempt from the health care requirement and will not be required to pay the penalty. They include, among others, immigrants with no Social Security Number and Americans living below the Federal Poverty Line. Those wishing to claim an exemption for any reason must file IRS Form 8965 along with their tax return.

Small Business Taxes

A vast majority of American companies (96 percent) employ fewer than 50 full-time workers, thus will see no major changes in mandates and taxes. Large companies are now required to provide health insurance to all employees. The mandate was set to go into effect last year, but was delayed by the Treasury Department due to logistical issues.

Firms with 25 or fewer employees can apply for subsidies and tax credits to help pay for insurance premiums if they choose to provide coverage to employees. Small business owners can use the SHOP program at Healthcare.gov to find the right plan for their company and employees.

Miscellaneous Taxes and Precautions

Most people will have no significant changes in their tax filing process or rates. A vast majority of changes that take effect for 2015 only pertain to high-income earners. The highest tax bracket (39.6 percent of taxable income) now applies only to individuals earning $406,750 or more. A vast majority of Americans (those earning between $9,075 and $89,350) will still pay 15 to 25 percent after standard deductions. Dependent children who reach the age of 26 this year and are no longer eligible for coverage on their parents’ plan have a special enrollment period to get their own insurance.

Americans are three times more likely to become a victim of tax fraud today than they were in 2011, according to identity-theft firm LifeLock. There is a lot of misinformation circulating on the Internet, particularly phishing emails that reference fake Obamacare taxes. They will appear to come from legitimate tax preparation firms like H&R Block or Jackson Hewitt. Never click on hyperlinks embedded in emails, no matter how legitimate they look. If you need information on an offer by a legitimate company, manually type in their URL. Those mailing in their returns should take them directly to the post office. Do not leave your mailbox flag up with your return inside—this leaves you vulnerable to having your information stolen.

Keep in mind open enrollment deadlines. Most questions about coverage can be answered on the Healthcare.gov website.