No Insurance all year (Play along)

[ILLMAS]

What will be the penalty for this family for not having health insurance for the year?

 

Facts:

Chris & Amy under 65

Sam & Pat are 5 & 8

 

Total income was $65,000

Federal Withholding $8,600

 

 

Please post how you arrived to your answer.

 

[Lynn EA USTCP in Louisiana]

I used CFS Tax Tools Module - ACA Individual Mandated Health Insurance Penalty - to calculate this.  I don't know how they came to the answer, after answering the questions on their worksheet. 

 

The annual penalty is the greater of 1.0% of income above the filing threshold (determined to be $20,300), OR $95 per adult (half for children), capped at 3 adults ($295). 

 

So, $65,000 less $20,300 equals $44,700 x 1.0% = $447 2014 penalty

[Terry D EA]

I am with Lynn on this one.

 

The 2014 penalty is the greater of 1.0% of income above the filing threshold or a minimum of $95.00 per adult and $47.50 for each child capped at $285.00.

 

$65,000 - $20,300 (assuming MFJ) = $44700 X 1%= $447.00.

 

Hmm, wondering why the amount of Federal WH was given?

 

 

[Lynn EA USTCP in Louisiana]

I think the W/H was given as a red herring.

[ILLMAS]

Great observation, I just threw in that figure, has nothing to do with calculating the penalty. 

[easytax]

Agreed on numbers with one explanation (I used "Tax Policies Calculator" at: http://taxpolicycenter.org/taxfacts/acacalculator.cfm ).

 

Not stated but assumed to get the answer we received:    Family was considered married filing jointly.

 

Should all the "household" income have been from other than "married filing joint" (still with dependents, kids, etc.) the numbers do change.

 

   Thanks for question as I had "forgotten" about the penalty aspect (current clients ALL have insurance) but it now "easy" to find/look-up for new ones that do not have insurance, etc.

 

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