If you didn’t have health insurance for all or part of 2014 you may be getting back less than you think (or worse, paying more than you thought) thanks to Obmacare penalties.
Under The Affordable Care Act 2014 marks the first year everyone had to carny health insurance for at least 9 out of the 12 months or get hit with a tax penalty.
Since most people without Obamacare have forgone it because they can’t afford it, those penalties can really hurt.
The penalty is either 1% of your taxable income or $95 per adult and $47.50 for each child (maximum $285), whichever is higher; taxable income is your salary plus any other income you may receive.
1% may not sound like much, but if an individual files single and has a taxable income of $22, 500 they will pay a penalty of $225.
That’s almost the same amount of money they would pay for a year of health insurance (a basic plan costs about $300 yearly).
Even worse, those penalties are expected to go up each tax year.
This has a lot of people upset because they feel Obamacare targets the poor and middle class by making them pay a penalty because they can’t afford to pay for insurance (which is a bit ironic).
So, how do you avoid those penalties (besides buying into Obamacare)?
The best way is to have a professional do your taxes. Most tax professionals can find exemptions to offset those penalties so you pay little or nothing.
If you can’t afford a professional and do your own taxes use software like Turbo Tax, which guides you through finding exemptions you can qualify for.
That service is not included with the Free Turbo Tax edition, but can be accessed as part of their $34.99 plan ( a small price to pay to get out of paying those penalties).
Finally, to avoid similar issue in the future you can try to apply for Medicaid. Household income qualifications differ for each state, so go to Healthcare.gov to see if you qualify.
What do you think about the Obamacare tax penalties? Share your thoughts about it with us below.
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