Amount of Tax Penalty For No Health Insurance
Are you aware of the fact that there is Tax Penalty For No Health Insurance? This should not come off as surprise, but quite a few people are unaware of the consequences of being insured. Yes, those who are able to afford a health insurance policy should never choose to be uninsured. When you consciously make a decision to opt out of purchasing a health plan, be prepared for the consequences.
Said consequences are not restricted to not having full-access to affordable health care whenever and wherever you need it. But also extends to tax penalty. The government has given quite a leeway in order to get everyone on board. However, starting the end of 2016, things were set to change. The government has enforced the law regarding tax penalty.
Tax penalty law, also referred to as ‘individual mandate’ and ‘fine’, has been informed to the public from the beginning. It’s stated that those who can afford health plan yet chose to opt out are required to pay a fee. This fee must be paid for when they file their federal income taxes starting the 2016 tax season. Are you interested in learning more about the fee and penalty law? Read on to find out.
Two ways to calculate your penalty fee
Largely depending on your situation, there are two ways in which your fee may be calculated. The first is a calculation based on the percentage of your annual household income. Whereas the second one is a calculation based on a set amount. This amount of fee will then be added according to the number of people who are uninsured in your household.
The exact amount of Tax Penalty For No Health Insurance is assessed right when you’re filing your federal income taxes. Those who have been uninsured for more than 3 months will have to pay a significantly higher penalty fee.
The penalty fee increases annually
This penalty system has actually been introduced for some time. As comparison, let’s take a look at the fine for the 2015 tax season. The fee at the time was 325-dollars for every uninsured individual, or 2-percent of the individual’s annual household income. In 2016, the fee increased to 2.5-percent of their annual household income, or 695-dollars for every uninsured individual.
Every month you are uninsured will be counted
Last but not least, it’s worth noting that the fine is calculated based on how long you have gone without being insured. Calculated monthly, the more months you go uninsured will result in higher Tax Penalty For No Health Insurance fees.