While the Supreme Court has spoken, we seem no closer to understanding if there is a tax or penalty regarding the health care overhaul passed recently. Regardless of its classification, it is a fee that we must understand might affect future income tax returns. <\/p>\n
The fee changes over time, so for now we can only look ahead to 2016, which is the last year a fixed amount of the fee can be determined for everyone. <\/p>\n
The fee in 2016 is $695 per adult and $347.50 for each person under age 18. This translates to a potential $695 fee for those filing single with no dependants. A couple without dependants filing jointly could see a penalty of $1390. A family of four with two children under age 18 could see a penalty of $2,085. This amount will be added to the tax owed on your income tax return. <\/p>\n
In years following 2016, the fixed fee is replaced by one that is a percentage of your total gross income. <\/p>\n
What Ive just outlined is the maximum fee that can be assessed. There will be complicated formulas that will calculate a reduction or elimination of this maximum fee. The fee does look at the entire household not just individuals with the filer being responsible for paying any fee assessed to that household. <\/p>\n
For those of us living in Massachusetts, this is already a routine we perform when completing our own state income tax return. The maximum fee in Massachusetts for last year was $1,212 for any individual over age 18. An uninsured married couple filing a joint return could be looking at an extra $2,424 added to their tax burden. Massachusetts does not assess a fee for those under age 18 who do not have health insurance. Again, there is a complex array of conditions that might reduce or eliminate the fee. <\/p>\n
At stake, then, are two fees, which, for a family of four, could represent a $4,509 tax liability in 2016. Now, it is very important to note that those who have a defined level of health insurance would not be required to pay either fee at all. The fee is only imposed for those who do not carry health insurance for themselves or members of their household. Safe to say, seniors enrolled in Medicare will have no need to worry about or be concerned about the fee. <\/p>\n
On the other side of the equation, there could be a tax credit applied for those who do have health insurance and cannot really afford it. The tax credit is intended to lower the total cost of health insurance premiums paid. Sadly, it is yet another complex calculation based on income and health care premiums paid. <\/p>\n
Surely, there will be taxpayers calculating their cost of compliance verses the cost of non-compliance. But what is really at stake is an ability to obtain professional health care when it is needed. We never know when that will be or which of our loved ones might require it. If ever needed, the fee will probably be an irrelevant concern. <\/p>\n
Ron Griffin is a Medfield resident who writes about Medicare. He can be reached at Rongriffin65@Gmail.com<\/a>. <\/p>\n<\/p>\n Link:<\/p>\n Senior Health Matters: Health care -- penalty or tax?<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" While the Supreme Court has spoken, we seem no closer to understanding if there is a tax or penalty regarding the health care overhaul passed recently. Regardless of its classification, it is a fee that we must understand might affect future income tax returns. The fee changes over time, so for now we can only look ahead to 2016, which is the last year a fixed amount of the fee can be determined for everyone. Continue reading