I’ve been noticing that pretty much every day has some kind of designation now. Sibling day. Work-from-home day. Pizza day. Pie day. Laundry day?
But April 15 is and always will be Tax Day. Well, maybe not always but I’m a realist and don’t see any circumstances that might cause such a change in the tax system that we wouldn’t have an annual day to declare our income and figure out how much we get back/owe.
I know that it’s a big goal for some in the community to not pay taxes. I respect the goal but, while I’ll stop short of saying I’m a fan of paying taxes, I generally subscribe to Harold Pollack’s personal finance philosophy of supporting social safety-net programs. Those programs are paid with taxes, so there you have it. Maybe it’s too much to ask that we celebrate Tax Day but there is a silver lining to it.
But with that said, we also don’t want to overpay, right? Of course not.
Here are just a few things to remember for this Tax Day:
- There’s still an Individual Mandate: You may have heard that the individual mandate was “repealed.” Technically, it wasn’t — the tax that applies to the Individual Mandate was just set to $0, which basically means that even though you’re supposed to have health coverage, nothing’s gonna happen to you tax-wise if you don’t. Either way, that doesn’t kick in until the 2019 tax year, so you still need to provide a 1095-A, 1095-B, or 1095-C tax form. What’s the difference?
- 1095-A forms are for those who have coverage through a state or federal marketplace — Obamacare plans.
- 1095-B forms generally come from your health insurer if your employer is “fully insured,” which is most small businesses.
- 1095-C forms generally come from your employer if they are “self-insured,” which is the majority of large companies (like 1,000 or more employees).
- Even though you’re probably not going to have to pay for not getting health insurance, you still need good health insurance. Don’t bet on your invincibility and don’t buy bad insurance!
- If you have an HSA (or medical savings account, AKA MSA) and you’ve used the funds, either for qualifying medical expenses or not, you need to report that amount on your taxes. You should get form 1099-SA from your HSA bank. You may also need form 8889 to itemize your HSA funds for which you “took a distribution,” to determine how much you owe in taxes if any of it was not a qualifying medical expense and to prove to the IRS that you don’t owe additional taxes if the expenses qualify. Here’s more information from TurboTax.
- If you don’t have an HSA or you aren’t taking a distribution (i.e. paying for medical expenses) from your HSA, you can still deduct medical expenses equaling up to 7.5% or your adjusted gross income. (This amount goes to 10% for the 2019 tax year and beyond.) There are a lot of different types of things you can deduct that look a lot like the qualifying expenses list for HSAs and FSAs. Here’s a helpful link from H&R Block.
So there you have it. Just a few quick tips to get through Tax Day with a yay instead of a nay. Don’t leave any money on the table, people!