Monday, January 19, 2015
Ah tax refunds. Did you include Obama Fines?
This old man loves to bring you the truth, and of course many of you look at the truth as stories. Then when your hit with the TRUTH, it’s just too late. But, at lease I do the research and let you know. Enjoy sheep!
The cost of the 2014 Obamacare penalty is calculated in one of two ways, with you paying the higher amount. The penalty is either 1% of your taxable income, or it is $95 per adult and $47.50 per child with a maximum amount of $285.
Taxable income is figured every year on your tax return and includes your salary and adjustments for any additional income, exemptions and deductions. Your tax return walks you through how to determine this figure and will likewise help you determine the amount of your penalty.
So, for example, if a single person’s 2014 taxable income was $22,500, her 1% would be $225, far more than the individual penalty of $95 per adult. Therefore, she would be penalized the $225 because it is the greater of two fees.
Another example: If a single-income household with two adults and three children brings in $27,000, their 1% fee would be $270, but their flat fee would be $285. Their penalty would be $285, as it is the greater of the two options.
In 2015, the ACA penalty will be 2% of your household’s annual income, or $325 per adult and $162.50 per child, whichever total amount is greater, to a maximum of $975.
In our examples above, the single-person household would pay double the fee in 2015, $450, or a 2% of their annual income. For the family of five, the penalty would be $975, using the flat rate calculation.
In 2016, the penalty rises again. You will pay 2.5% of your annual household income, or $695 per adult and $347.50 per child, to a maximum of $2,085.
For 2017 and beyond, the fine will remain at 2.5%, but the flat fee will be adjusted for inflation.