Income Taxes

Definition - What does Income Taxes mean?

Income taxes are taxes that the United States federal government levies upon its citizens based on the income that they make. Income taxes are a certain percentage of the total income a person makes. In the context of insurance, tax payers who do not have health insurance can now face financial penalties if they indicate in their income tax return that they do not have health insurance coverage.


Insuranceopedia explains Income Taxes

Prior to the Affordable Care Act, it was not necessary for people to carry health insurance coverage in America. However, it now is. People who cannot afford to buy private health care insurance can sign up for health insurance coverage on Healthcare.gov. If they qualify, then they can get the insurance at a lower fee. The penalty for not having health insurance (indicated by income tax returns) is designed to create incentive for people to get health insurance. People with high incomes may not qualify for government sponsored insurance.

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