Household Income

[ILLMAS]

Husband had health insurance for the whole year, wife didn't, to calculate the penalty, do I include wife's household income only or also include the husband?  For some reason, I thought ATX picked up the appropriate income and we only had to include dependents income apart from the parents.

 

Thanks

 

MAS

[jklcpa]

Household income would include the husband and the wife.

 

None of the programs are able to calculate that figure automatically because there is no way the programs would automatically know about dependents' income where they might be filing their own returns.

[Pacun]

ILLMAS

 

If none of the dependents are filing a return, no self employed or Social security, just enter line 39 from 1040 to calculate. Technically the penalty is 1% above 20K (roughly).

[ILLMAS]

Thanks, but this kind of stinks for the person that did have health insurance, let's say this person made $40K and wife makes another $40K and the penalty is based on $80K less $20K = $59K and penalty is $597.  So the husband is getting penalized for approx. $20K    of his hard earned income. 

[Pacun]

Yes, it is hard on people. BELIEVE me, most of my clients are under 50K, so I thought that $95 per head was not bad until I make the calculations. I thought $95 was the maximum someone was going to pay but it is the minimum. So if you client made 21K, they have to pay $95 but if they pass 30K, everything starts to stink.

[ILLMAS]

Coño

[B. Jani]

I just finished with single client 70k AGI without health insurance. Penalty came out 1% to $643 and when I asked him about this, he said, if I buy insurance, cost me 4000k so just pay penalty and still coming out ahead. Every case this year is FUN!!!!!!!!!

[BulldogTom]

Frikkin' Unbelievable Nonsense

 

FUN

 

Tom

Newark, CA

[Pacun]

I had a person in the same situation. He is 22 and he doesn't need to go to the doctor so no having health insurance makes sense. I don't have pedestrian insurance and I believe the chance of me needing pedestrian insurance is higher than this person using his health insurance.

 

So, from an economic point of view, it makes sense for some young people to pay the penalty this year and the next.

[easytax]

I had a person in the same situation. He is 22 and he doesn't need to go to the doctor so no having health insurance makes sense. I don't have pedestrian insurance and I believe the chance of me needing pedestrian insurance is higher than this person using his health insurance.

 

So, from an economic point of view, it makes sense for some young people to pay the penalty this year and the next.

Until they have an accident or get really sick.

 

But then, many will just look for the "program" that will pay those bills for them too.

 

I do not like being told I have too -- on most anything  BUT some things I can understand --- car insureance, fire insurance, etc., etc.  as it the burden is not only on me but on someone else   ---- now if those folks just wanted to NOT be card for, etc. and possibly die ---- but there are "programs" for that too  and in some cases --- the government even makes it illegal to chose to die  ---- unless by cop maybe === but then the poor officer gets grief ---- usually more from them having to take a life (self incrimination, etc.) even when the "public" takes them to task for doing their duty --- but I am biased due to "pass life".

 

Bottom line, if they can "work" the system and save money --- they are allowed --- but it does not make it right to pass the bill onto others, if it can be prevented.

 

AND NO --- I am not in favor of ACA as current --- some great ideas and some fair "fixes"  but NOT done as congress has.   (Thant is another discussion and has nothing to do with "politics"  just common sense and doing what is best for country, not just to get noticed and have a job.

Edited February 13, 2015 by easytax

[Gail in Virginia]

By your reasoning, Pacun, it makes sense for anyone to pay the penalty rather than purchase health insurance as long as the penalty is less than the cost of the health insurance.  Nobody, no matter how healthy, can be sure they won't get sick or be in an accident and need medical care.  That is why we have insurance.  And when people without insurance get sick or injured and need care they can't afford, many times hospitals and medical practices wind up providing that care without getting paid.  And that drives up medical costs for all of us. 

[Pacun]

I tell people: Did you have insurance last year? they say no.

I say... You will have to pay a penalty this year. and they answer no problem.

I say... for next year, you should have health insurance or the penalty will be double or more. They say, no problem.

 

I go and prepare this year's taxes because that's what they hire me for.

 

I don't sell insurance and I am not in a position to force them to buy health insurance.

[easytax]

I tell people: Did you have insurance last year? they say no.

I say... You will have to pay a penalty this year. and they answer no problem.

I say... for next year, you should have health insurance or the penalty will be double or more. They say, no problem.

 

I go and prepare this year's taxes because that's what they hire me for.

 

I don't sell insurance and I am not in a position to force them to buy health insurance.

Agree with that.   We do our job,  if clients do not do what is required and "choose" the penalty, we can not force them  NOR should we have to.

[Gail in Virginia]

And I agree with both of you: I just am not willing to tell them that it makes sense for them not to have insurance.  I prefer to point out the facts on both sides of the argument IF ASKED and let them decide what if anything they should do.  i am not going to tell them it makes economic sense to forgo insurance when I have not got a working crystal ball. 

[Pacun]

I just tell them. Do you play the lotto? if you don't have insurance and if you hit the lotto for 500m, you will have to pay $4,896 in penalty.

 

So, I entered $500,000,000 on W-2g and $30K on W-2.

 

If you don't hit the lotto, you will pay $398 in penalty

[jklcpa]

If I hit that 500m lottery, I sure as heck won't be worrying about clients, the ACA, or repair regs and the 3115 ever again. Maybe I'd even hire someone else to prepare my returns.

[Terry D EA]

Amen to that!  If I hit that lottery I would definitely hire someone else to do my returns. Let them have all the fun they can stand. Heck I might turn into a day trader. Imagine the fun with that!! Had a client today that would rather pay the penalty. What can you say? I gave them all of the information available to me regarding the penalties next year and so on. So... let them choose. Not my job to sell insurance or force them to be compliant to some ridiculous pile of crap like the ACA.

Edited February 14, 2015 by Terry D

[Pacun]

I thought you people were going to say, why is the penalty sooooooooooo low in $500,000,000? Not only that, I already doubled the amount to reflect 2015's penalty.

[RitaB]

Sort of unrelated, but this thread made me think of my guy, who came in the day after dropping off his return to ask me: Oh, yeah, I'm retiring early. What am I going to do about health insurance?

Beg pardon? I was calm on the outside, but on the inside I killed three people. Insurance salespeople, Nancy, and POTUS make a lot more than me, and you are asking me this question?????

I pretty much told him (in my sweet way): I don't have any insurance to sell, affordable or otherwise, so if you're looking for me to solve this problem, I guess you better keep working, Buddy.

[JohnH]

Another weird result with ACA. (One of my "freebie" returns). Single guy, age 64 earns about $15K plus another $12K in Social Security Benefits. He's a veteran, so he just goes to the VA for medical issues/prescriptions and doesn't see any need to have health insurance. Our state didn't go for the expanded Medicaid, so based on his W-2 earnings he gets to use exception "G" for the penalty. But wait. When we add his Social Security income on Line 20a, none of which is taxable, his exemption goes away and now he has to pay the $95 penalty. I'm sure glad he is eligible for Medicare next month. Also glad for the person who will be preparing his tax return next year.

[jklcpa]

>goes to the VA for medical issues/prescriptions<

 

So he just goes to the physical place, the VA hospital or clinic in your area, and he wasn't actually enrolled in the VA health care program?  

[JohnH]

Yep, that's right. He isn't a retiree, but he is a veteran. He just shows up at the VA hospital if he has a medical need. They treat him, he says he can't pay, signs a few papers, and he's on his way. There is a program with the VA which he could have enrolled in, but he never bothered to do it. Guess it's a moot point now that he's almost 65.

Edited February 24, 2015 by JohnH