ACA Tax Penalty Calculator

[Yagents]

For those of you who sell the "fear of the penalty", here is a useful calculator for the last OE push. And no, it's not just $95 for most.

Tax Facts | How Big is the ACA Tax Penalty?

Family of 4 at 100k =
$797 for 14' (equivalent to 1 month of premium)
$1648 for 15' (equiv to 2 mo of prem)
$2125 for 16' (3 months)

 

[Nikita]

For those of you who sell the "fear of the penalty", here is a useful calculator for the last OE push. And no, it's not just $95 for most.

Tax Facts | How Big is the ACA Tax Penalty?

Family of 4 at 100k =
$797 for 14' (equivalent to 1 month of premium)
$1648 for 15' (equiv to 2 mo of prem)
$2125 for 16' (3 months)

I thought the IRS wasn't going to actively try to collect this penalty, only deduct it from the person's tax refund and they didn't have a tax refund then it wouldn't be collected. Is this correct or not?

 

[Yagents]

Sure, run with that.........your clients will love being reminded by the IRS constantly. Plus, they'll love trying to under withhold taxes each year, and good luck if you're self employed trying to estimate that number, and be at risk of underpayment penalties.

 

[deadhead]

A 797 tax penalty is better than a 12000 premium bill

 

[AllenChicago]

I thought the IRS wasn't going to actively try to collect this penalty, only deduct it from the person's tax refund and they didn't have a tax refund then it wouldn't be collected. Is this correct or not?

The fy2014 tax return will ask (paraphrasing) "Have you had Major Medical Coverage for at least 9 contiguous months in 2013?"
YES:____ Enter Policy Number and Insurance Company Here:______________
NO:_____ Proceed to Schedule Penalty2014 to calculate your Penalty-Tax.

You can say "YES" (i.e. lie) and enter a Fake Number, but Oh what a legal mess you're creating for yourself! Or, you could simply ignore that question. Not sure how that would be handled... The return gets kicked out of the IRS processing system perhaps?

As Spike Lee says, "Just do that right thing arsehole.. GET COVERED!"
-ac

 

[Guest]

I've never like Spike Lee.

 

[deadhead]

I've never like Spike Lee.

Let spike lee pay my premiums

 

[Ann H]

I thought the IRS wasn't going to actively try to collect this penalty, only deduct it from the person's tax refund and they didn't have a tax refund then it wouldn't be collected. Is this correct or not?

The IRS is limited in collection activities that it can use to collect the penalty. The easiest way to get the money is from your refund. But it's not the only way.

They cannot PUBLISH a lien, either. But they can file a lien. If it's not published, most entities (like banks) won't know it exists. But the government knows. So, if you are due any money from the government (like grants, stimulus checks, back payments for SSDI, refunds, or....... possibly APTC) they can take your penalty amount out of those government checks. Also, it is quite likely that those dealing in complex transactions (like real estate for instance) will look for liens like that.

So, just like Yagents keeps hammering that the penalty is not $95, it's the greater of $95 or 1% of income, I keep hammering that the penalty can be collected from a lot more than just your tax refund.

 

[AllenChicago]

3-21-2014

Penalty parameter wording added to HC.gov. (Bolded=New?)

"The way the penalty is calculated, a single adult with household income below $19,650 would pay the $95 flat rate. A single adult with household income above $19,650 would pay an amount based on the 1 percent rate. (If income is below $10,150, no penalty is owed.)"

Source Page: https://www.healthcare.gov/what-if-someone-doesnt-have-health-coverage-in-2014/
ac

 

[Yagents]

That 10k number is the tax filing threshold which is not counted in the calculation.