Obamacare and your 2012 tax return
Your adjusted gross income for 2012 could have a profound impact on how much you pay for health insurance next year if you don't get coverage through your workplace or a government program.
This post comes from Jonnelle Marte at partner site MarketWatch.
Starting next January, the Affordable Care Act mandates that every American have health coverage, and those who remain uninsured will pay a penalty. The extent to which one is eligible for federal subsidies to buy insurance, and the penalties for failing to comply with the mandate, will both be determined using one number: the adjusted income reported to the Internal Revenue Service this year.
"So much of the Affordable Care Act is being implemented through the tax code," says Kathy Pickering, the executive director of the Tax Institute at H&R Block. And for many taxpayers, "their tax situation will factor into health care decisions as well," she says.
The penalty, which was upheld as a tax by the U.S. Supreme Court in June, will vary per family based on their size and income. The fee starts at $95 per person next year, or 1% of household income above the minimum threshold for filing a tax return -- whichever is greater.
And the penalty is scheduled to increase each year to $695 per person in 2016, or 2.5% of income. (After that, the penalty will be adjusted each year for inflation.)
For a single person with $50,000 in taxable earnings, the charge would start at $400 next year, estimates H&R Block. And for a family of four with two children and a household income of $100,000, forgoing insurance would add another $800 to their tax bill -- a sum that would be deducted from any refunds. (The penalty is cut in half for children.)
The government will provide subsidies, which would cap how much families spend on insurance premiums to a portion of their income. The subsidies will be available to those earning incomes of up to 400% of the poverty rate, which works out to roughly $45,000 for an individual and $92,000 for a family of four. (See the H&R Block Health Care Estimator.)
To be sure, people who get health insurance through their employers or through a government program like Medicaid will not be impacted by the penalty. But those shopping for insurance on the individual market may still opt to pay the penalty, experts say. Annual health insurance premiums for people working at small firms averaged $5,600 for individuals and $15,200 for families in 2012, according to the Kaiser Family Foundation. (Of course, the decision to remain uninsured could end up being far more expensive if individuals face unexpected medical emergencies.)
In order to avoid the penalty, taxpayers will need to buy the minimum amount of health insurance required under the health care law. One way to meet that amount is to purchase a plan offered in the individual insurance exchanges being set up by health care reform, where individuals or small-business employees can shop for health coverage -- possibly with the help of federal subsidies.
Levels of coverage will vary, and some plans will have to offer essential benefits including hospital, emergency, pediatric benefits and other services. Dental-only plans, for example, won't be enough to avoid the penalty.
Tax preparers say clients are already asking questions about how health care reform will impact their tax bills -- and vice versa. At H&R Block, preparers are calculating what a taxpayer's insurance costs might be by using their returns to estimate the federal subsidy they might receive. They're also talking to families about what penalty they would have to pay over the years if they decide not to buy insurance.
Mark Steber, chief tax officer for Jackson Hewitt Tax Service, says they are fielding questions from taxpayers on the penalty and how insurance subsidies will work, and that the firm is evaluating if it will add a health care component to its tax prep services.
More on MarketWatch and MSN Money:
Did you honestly think the government was going to foot the bill for your health care? Hahahahah!!!!!!
This is the part where all those people who voted for this crap begin to realize that maybe they should have read the proposal before getting on board with it, you know.....the part where they say "what have I done to myself!"
If this isn't the beginning of Obozo dictatorship, then turtles fly. This socialist muslim is destroying America, and our freedoms at an alarming rate. Obozo and his liberal cronies need to go.
Fact.... Republicans are either rich or un-educated
Fact....Studies show Republicans have a significantly lower IQ....than Democrats
Which are you?
Oh well, what is there to say that you got what you voted for, even though most of you have not voted for Mr. Obama, but you will have to suffer through his policies because he won the election just asking it to you that to I one get over it. That's what you say and oh by the way. All the unions are exempt from Obama care, at least up to year 2020. I think all these liberals handed out all kinds a waiver stuff all their good soldiers. That paid their way to the White House again, California Nancy Pelosi's home state.
She passed out all kinds a waivers and a few other ones did. Too imagine if you go on the government site you can find them all, I think you know that so were all in for the ride, whether be like it or not, but there's one thing that can happen to put a stop to this, but I don't think the Republicans have enough colonies to do it in that stop funding it. That's all. They got a do is save Mr. Pres., were not funding Obama care anymore.
Now do you think that would go over with the mainstream media. They would have a field day would they I can see the news headlines now the Republicans. Why kill the poor people and grandma and grandpa to by not funding Obama care, let's not forget the little kids this isn't going to stop illegals from getting healthcare all they have to do is walk into any hospital emergency room and they will be treated and no, he will not be turned in for be any legal aliens because hospitals will do that they were told not to do that by their administrators, so the so they can get refunded from the government for their services.
Those are facts. That's what happens in this country, so if you think it's bad now just wait to 2016, when it really kicks in all those extra taxes in this bill will definitely bankrupt this country and asked exactly what Obama wants to do bankruptcy United States to the point of no return. That's his revenge for his father and his people in Kenya where you believe it or not I really don't care that's what you people voted for this is what you get the rest of us just goes along for the ride and watches country fall and fall it will. As long as this man's in charge.
Whayever you do. Don't Rattle A Liberals Cage - These Animals Are Taking A Nappy Nap for Their Nappy Hair And Beauty !
LIKE OBAMACARE - The Doors Open Wide For FRAUD And WELFARE CHEATS - So Time To Get On Welfare Eh' ...........
What will the Educators do when we vote for Less Taxes, they have to pay for their own OBAMACARE and Give Kids A Hand Up ?
Aren't You Glad You Voted For OBAMA - You Get To Pay More TAXES.......... Not What You Figured On Eh' LIBBY LIBS ?
OBAMA Lemmings.............. Over The Cliff We Go Into The Abyss !
What a (*^(*&^(*&^ bunch of douche bags for voting Nobama in. Now we all have to suffer this BS
I dont want healthcare .I am fit and healthy and my parents lived well into their 90s. Just wait till all these illegal's get their Tax return taken away LOL TOO LATE !!! I don't want to pay for health insurance and I sure as hell don't want to be fined for it .Wake up America Pay Attention!!!!!!
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
ABOUT SMART SPENDING
LATEST BLOG POSTS
A new federal safety report shows toddlers and minority children make up a disproportionate number of drowning victims.