HUNTSVILLE, Ala.(WHNT)-The Obamacare deadline that requires nearly every American to have health insurance hits at 11 p.m. CDT Monday, but questions abound as to how the new law will actually be enforced.
The Internal Revenue Service is in charge of making sure Americans comply with the law, and that means already busy tax preparers could have even more to deal with.
“Of course it’s cumbersome,” said David Freeman, owner of Liberty Tax Service in Huntsville. “It’s just something else that as tax preparers on a tax return that you have to deal with.”
The IRS specifically asks about your health insurance coverage in a new wrinkle on this year’s federal tax returns. Freeman said those who try to get around the requirement by being untruthful are likely at risk of being caught, regardless of whether they’re actually audited or not.
“We all have Social Security numbers, so they can look at the Social Security number on whether they’re insured or not, and tie that into their tax return to see if in fact that they have paid the proper tax penalty that comes along with that.”
For most people, the tax penalty for failure to have health insurance will be one percent of total salary minus $10,150. For someone who makes roughly $40,000 per year, it equates to a $300 hit. Critics of the new law say many people who are relatively healthy but poor have likely concluded that the tax penalty is still a better option than paying costly premiums that some predict will go even higher, working against the new law’s original intent.
“The fear is, what happens in future years,” said Freeman. “How much will the premiums go up? How much will they stay the same? We just don’t know at this point.”