No health insurance by next week means penalty in 2014 taxes

Mar 24, 2014 6:29 PM

One week remains to sign up for health insurance. Two weeks later, taxes must be filed.

But these two deadlines are intertwined in a way some may not know about.

If you usually get some help filing your taxes, you'll hear a new question this year: do you have health insurance? If you don't, you're going to feel it in your tax returns next year.

Benjamin Franklin once said nothing in life is certain except death and taxes.

Maybe if he were still alive in 2014, he would have added health insurance.

Signing up for health coverage and filing your taxes are no longer mutually exclusive.

The deadline to get covered is next Monday. And sure you could forego it, but then you're bound to see a penalty applied through your taxes next year.

“Depending on your adjusted gross income, it's either $95 for the first year or 1% of your adjusted gross income,” said Mary Gilman, the lead tax preparer for Liberty Tax in Chico.

And according to John Sweeney, it’s whichever is greater.

“If you make an annual income of $40,000, that's going to be a $400 fine, not a $95 fine,” Sweeney said.

Sweeney said he still hasn't seen the mad rush he expected to sign up under Covered California.

But nearby at Liberty Tax, the mad rush is on, as the deadline to file taxes is in three weeks.

Here, you’ll be asked personal questions. Like on page two: Do you have health insurance coverage?

“It’s a yes or no question,” Gilman said. “We have to mark one or the other or it won't go through.”

“You get a mixed response. Some people just say yes or no and some people go, "Well who's business is that?" Gilman said.

It isn't the business of tax preparers at Liberty to offer advice.

But John Sweeney said many people have been and will be pleasantly surprised with the subsidies they're eligible for.

Also, it's just being safe and smart—the whole idea of insurance in the first place.

“Ninety five dollars or 1% of your income may be nothing compared to a $100,000 medical claim that you would have if you don’t have coverage,” Sweeney said.

Death, taxes, and Obamacare: all certain, but the last two a little more immediate.


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