Healthcare

The Tax Laws Changed – Do I Still Need Health Insurance?

For tax year 2018 (return filed in 2019), you are still required to have health insurance for all months of the year. But on January 1, 2019, The Tax Cuts and Jobs Act will officially repeal the Affordable Care Act tax penalty. This means that going forward, if you don’t have health insurance coverage, you won’t be penalized when you file your tax return.

How much is the health care penalty for 2018?

The law says that you must prove you had minimal essential health insurance (or that you were exempt) for every month in 2018. Otherwise, you will be required to pay $695 per adult and $347.50 per child, or 2.5% of your adjusted gross income, or whichever is higher, up to a maximum of $2,085. This is the same as it was in 2017.

How long can you be uninsured without a penalty?

If you were uninsured for less than three months, you will not be penalized. If you were without health insurance for longer than three months, the amount you’ll owe will be pro-rated for the time you were not covered.

Can I deduct my medical and dental expenses?

When you file for tax year 2018, you will still be able to deduct unreimbursed medical and dental expenses that exceed 7.5 percent of your adjusted gross income. However, beginning Jan. 1, 2019, the threshold for claiming unreimbursed medical and dental expenses will go up to 10 percent.

Which medical and dental expenses are deductible?

Qualifying expenses may include dental and vision care costs, psychologist and psychiatric visits, prescription medications, and medical appliances like hearing aids, glasses and contact lenses. Preventative care, surgery, and travel related to medical care – like mileage or parking fees – are also considered qualifying expenses. Medical costs that are not deductible include cosmetic surgery and expenses already covered by your insurance provider.

To claim the deduction for medical expenses, you must itemize your deductions.