Obamacare tax forms are likely to cause headaches for consumers as the 2015 tax deadline approaches. These forms are quite complex and can be daunting to consumers.
The purpose of Obamacare tax forms is to allow the IRS to see whether or not consumers are required to have insurance, or whether they qualify for an exemption. People who do not have coverage when they do not qualify for an exemption will be penalized, in line with the rules set out by the Obamacare health reforms.
In order to fill in the Obamacare tax forms, employees need to obtain details of their health plans from their employers. They also need to gather information about their insurance policy from the state- or federal-run exchange that they used to purchase it. All of this information needs to be collected and submitted to the IRS prior to the April 15 tax deadline.
Judy Solomon, who is Vice President of health policy at the Center for Budget and Policy Priorities, says she is concerned about the introduction of the Obamacare tax forms. She points out that people are likely to have trouble understanding the new forms due to their complexity. Her prediction is that the introduction of the Obamacare tax forms could be similar to the roll-out of HealthCare.gov, which experienced serious teething troubles soon after its release.
The Obama administration insists that help is in place for people who are having trouble with the new Obamacare tax forms. The IRS has promised that detailed practical instructions will be released soon to help people complete the forms.
It's not yet clear what will happen to people who simply ignore the question about health coverage on the standard 1040 tax form. Alan Cole, who is an economist at the Tax Foundation, predicts that the IRS will not vigorously enforce the new tax filing requirements in the first year. Like many experts, he expects this year to be a trial run for the new Obamacare tax forms.
Although failing to provide the correct information about one's healthcare coverage might not result in a fine, at least during this first year, failing to supply correct information can delay tax refunds and lead to consumers getting into complicated interactions with the IRS.
Some experts also worry that some people could be forced to file late due to delays in the exchanges sending out the required paperwork. Consumers who purchase insurance through an exchange can't file taxes until they receive a 1095-A form from the exchange. With so many state exchanges struggling, tax expert Chris Condeluci has pointed out that the exchanges' track records don't suggest that the vital tax forms will be delivered on time.
Many problems are expected to arise following the launch of the new Obamacare tax forms. These forms are complicated and require many people to submit a lot of extra paperwork to the IRS. Experts agree that a strong public education campaign is needed to help people get to grips with the new system.
(Photo courtesy of Arvind Balaraman at FreeDigitalPhotos.net)
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