The man pictured to the right, Jonathan Gruber, has been featured all over the internet and on some news organizations as one of the (highly paid) architects of the “Affordable Care Act”. He has revealed just how deceptive the process was in passing this monstrosity of a bill (which no one read except those who wrote it).
It would be nice if we could void legislation passed in this manner, just like we can void a fraudulent contract. Alas, laws cannot be voided even if fraud and lies were told to push the legislation through the Congress. The best we could hope for is that those who testified before Congress, under oath, would be held accountable for their perjury.
Even though this law, in my opinion, should be completely reversed, it is highly unlikely that will happen anytime soon. So, we are left with calculating the taxes/penalties that are assessed under this law.
This is the name of the tax you pay IF you have not purchased health insurance this year. Most of my clients will not pay this tax because they already have health insurance coverage through their employers. Some have health insurance as individuals because they are self-employed or their employers do not provide coverage.
For the few clients out there who DO NOT have coverage, they are going to pay this “shared responsibility” tax. What is that tax?
The GREATER of:
1. $95 for an individual or $285 per family OR,
2. 1% of your household income that is GREATER THAN your income tax filing threshold (approximately $10,000 per individual, $20,000 for a family).
For example, if you are married and make $50,000 (the median income in the United States) your tax will be $300 ($50,000-$20,000 X 1%).
Sounds simple-right? Wrong! There are about 16 exemptions from this tax which many of my clients may be eligible for.
So….this is the year you want to get professional help on your tax return. We will be prepared to help you navigate this complicated process. If you are falling into this “shared responsibility” trap, please call for an appointment so that we can help you with a possible exception to this new tax.