Self-employed? Here’s What Obamacare Means for You

1099 MISC/K, Self-Employed thumbnail

Whether you are working as a freelancer or are enjoying making money in the fast-growing gig economy, congrats! You’re staring down uncertainty and taking a chance on yourself. Self-employment won’t always be easy, but your hard work and perseverance will pay off.

Although there are definite perks to being self-employed — flexible hours, a comfortable office, and being your own boss to name a few, you might also be wondering, what your health insurance options are and how the Affordable Care Act (ACA) impacts you.

Since you most likely buy your own insurance, there is information about the ACA that might interest you. Well sit back in your Lyft or home office and relax, because TurboTax has you covered with all of the ACA information for the self-employed you need to know:

First things first, you fall under the self-employed title if:

  1. You run a business on your own as a sole proprietor, independent contractor, or freelancer that generates income and you have no employees.
  2. You are a member of a partnership that carries on a trade or business.

Uninsured or want to change private health insurance you purchased? You can get 2017 coverage through the Health Insurance Marketplace during open enrollment from November 1, 2016 to January 31, 2017. Here are tips for getting your health insurance in the Health Insurance Marketplace that fits your needs.

Do I qualify for a subsidy?

Both individuals and families with annual incomes of up to 400% of the federal poverty level may be eligible for government assistance through a subsidy also known as a premium tax credit. If you qualify for a premium tax credit, then you may be eligible to pay a lower cost per month for coverage. The premium tax credit depends on household income and family size, and this assistance can be applied right away to your health insurance premiums.

Are there options to purchase insurance in the Marketplace outside of open enrollment?

Open enrollment in the Health Insurance Marketplace for 2016 health insurance ended on January 31 2016, but you can still purchase in the Marketplace if you are entitled to the special enrollment period. To qualify, you need to experience a qualifying life event and complete the application process. This includes events like marriage, divorce, having a child, or moving to a new state. Or, if a plan you bought outside of the Marketplace is terminated because your job status changed or for any other reason, you may also qualify for special enrollment period.

Do I qualify for Medicaid or the Children’s Health Insurance Program (CHIP)?

You can enroll in these services at any time of year, and register right away if you are eligible at the minimum income level of 133% of the federal poverty level.  These services are often free or lower-cost options.

What can I deduct?

If you are self-employed and paying out of pocket for your health insurance, both you and your dependents’ health care premiums are fully deductible on your tax return. As in the past, you can also continue to list unreimbursed medical expenses as tax deductions.

Do I qualify for any exemptions?

In some instances, individuals may be exempt under the ACA. Check healthcare.gov or irs.gov to find out if you may fall under this category because you might be able to bypass the tax penalty associated with not purchasing health insurance.

As with all tax laws, TurboTax is up to date and has you covered. If you have more questions about the ACA, TurboTax is here to help you understand how the law could impact you and your taxes.

 

 

 

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