The Affordable Care Act is the biggest single change to the tax code in 20 years. And while you may know what the health care law means, you might not know how it affects your taxes.
“Almost every American is now required to have some level of health insurance,” says H&R Block tax professional Richard Gartland. “If you don’t have it, you’ll face penalties which will be collected on your 2014 tax return.”
The amount of the penalty will depend on your income.
“If you’re very low income, you’ll have a very small penalty but of course, the higher the income, the higher the penalty for not having that individual coverage,” explains tax accountant Janice Hayman.
On the flip side, if you do sign up for health care, depending on your income you could be eligible for a tax subsidy to help you pay your premiums.
The IRS website has more details on how Obamacare will affect taxpayers this year.