Tax Forms 1095-A, 1095-B: What You Need to Know

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Tax season brings with it a flurry of forms and paperwork, and among these are Forms 1095-A and 1095-B. These forms are crucial for individuals to understand their health insurance coverage for the year and how it affects their taxes. Here, we simplify what these forms are, who receives them, their purpose, and whether they are easy or complicated to handle.

What Are Forms 1095-A and 1095-B?

Form 1095-A, Health Insurance Marketplace Statement: This form is provided to individuals who have purchased health insurance through the Health Insurance Marketplace. Form 1095-A contains information about the insurance policy, premiums paid, and any advance payments of the premium tax credit. This form is essential for filing your taxes because it helps determine if you need to pay back any of the tax credits or if you are eligible for a larger refund.

Form 1095-B, Health Coverage: Insurance providers send this form to individuals who have health coverage outside of the Marketplace, such as through an employer or a government program like Medicaid. It details the individual’s health insurance, including who in the household was covered and the months they were insured. Form 1095-B is proof of insurance for the IRS to confirm that you met the health coverage requirements.

Who Gets These Forms?

Individuals who bought insurance through the Marketplace receive Form 1095-A. You would receive this form if you switched plans or purchased a new policy in the Marketplace during the tax year.

Health insurance companies generally send Form 1095-B to those who had coverage through their employer, small businesses, or government programs like Medicaid and Medicare.

What Are These Forms For?

The primary purpose of these forms is to report your health insurance status to the IRS, which is crucial for fulfilling the requirements of the Affordable Care Act. Here’s how they help:

Form 1095-A helps you reconcile or adjust any advance payments of the premium tax credit you may have received, ensuring you claim the correct amount on your tax return.
Form 1095-B serves as proof that you met the health insurance coverage requirement for the year, helping you avoid any penalties for lack of coverage.

Are These Forms Easy or Complicated?

Form 1095-A can complicate matters because it directly affects your tax return. You need to use the information from this form to complete Form 8962, Premium Tax Credit. This is necessary to determine if your advance tax credit payments were too much or not enough, which could affect your refund or amount owed.

Form 1095-B, on the other hand, is simpler. It does not require any additional action unless you are somehow prompted by the IRS. You don’t need to attach it to your tax return; just keep it as proof of your insurance.

How Local Tax Can Help

If you find dealing with Forms 1095-A and 1095-B or any other tax forms overwhelming, Local Tax at 9429 Somerset Blvd, Bellflower, CA 90706 can assist you. Our experts are skilled in managing these forms and ensuring that your tax filing is accurate and stress-free. To get help with these forms or any aspect of your tax preparation, call us at (562) 925-2203 to make an appointment. Our knowledgeable staff is ready to provide you with professional assistance.

Conclusion

While Form 1095-A requires a bit more attention due to its impact on your tax credits and final tax return, Form 1095-B is straightforward and more about record-keeping. If you receive these forms, take a moment to understand them and how they relate to your tax situation. If you find Form 1095-A challenging, consider seeking help from a tax professional to ensure you file your taxes correctly. Remember, staying informed and prepared is key to handling your taxes efficiently and effectively!

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