Avoiding tax & health insurance mistakes before filing your income tax return

Tax day is stressful enough and changes to the health care system can really add unnecessary pressure, but you can avoid that altogether by informing yourself. If you don’t have health insurance, it’s going to cost you, but some other all-too common mistakes can prove to be just as costly.

“I didn’t know that taking money from my 401K that that was considered income. I thought it was something totally separate,” Yolanda Chacon said.

Chacon says that extra income wiped away the exemption she had from the health insurance requirement and cost her a penalty.

She’s not alone. Penalties for not having insurance increased to $325 per adult or 2% of your income, whichever’s higher.

“There are still a lot of questions out there and many each year,” Project Amistad navigator Rosalva Hernandez said.

Hernandez tells Abc-7 one of the biggest mistakes people make is not reporting changes like new income sources or new dependents. You may also be surprised to find you qualify for a subsidy.

“The government continues to issue subsidies to households that qualify, that subsidy is going to help that individual pay for the health insurance that they enroll in in the marketplace,” Hernandez said.

While everyone is required to have health insurance, there are some exceptions.

“If your income level isn’t as high you may be exempt, maybe you were unemployed, or single,” Manager at RPC CPA’s & Consultants Imelda Moreno-Acosta said.

Acosta tells Abc-7 even if you are unemployed, you won’t necessarily be penalized.

“You have an exemption of three months if you weren’t covered during that period, you don’t have to pay a penalty,” Acosta said.

Another surprising detail, if you’re covered by your employers health insurance, you still have options.

“They can come through the marketplace and still shop but the only thing is they won’t qualify for a subsidy,” Hernandez said.

Both Hernandez and Acosta say it’s better to be safe than sorry by asking questions because it may end up costing you in the long run.

“Just be patient and ask questions, so you can get the answers you really need,” Chacon said.

Tax day is Monday, April 18th but you can file for an automatic six month extension.

If you’d like further information on signing up for healthcare you can contact Project Amistad at (915) 298-6997.