Minimum Health Insurance to Avoid Tax: Find Cheap Plans
Minimum Health Insurance to Avoid Tax: Before making a purchase of health insurance plan, one should learn about all aspects of insurance such as penalty, amount of insurance coverage, and payment of penalty when non-payment of premium. Here are some situations where you should be careful. Here we will check minimum health insurance to avoid tax and calculate the health insurance penalty.
No Penalty Levied
If a person has health insurance that is provided by his employer and covered by Medicaid or Medicare or he has purchased it through a private provider, there is no reason to worry.
If a person can’t afford health insurance, there is no need to pay a penalty. But if a person can afford health insurance and still refuse to buy it, he only will be responsible for payment of health care expense as well as a penalty to internal revenue service.
Amount of Penalty
In the year 2014, the amount penalty is $95 per adult and $47.50 per child with a maximum of $285 per household or 1 percent of income, whichever is greater. Here 1 percent of income is calculated based on adjusted gross income that exceeds standard deduction and personal exemption for income tax purposes.
Do the Math
For the years 2008 to 2012, the U.S. Census Bureau estimates household income in the U.S. is $53046 and the average household persons are 3. According to TurboTax’s penalty calculator, the maximum penalty for the average American family is $330.46 per year.
Keep in mind the Deadline of Health Coverage
Keep regarding that open enrollment through the state government closes in March 2014. Before this date, one should be insured with health insurance. After this deadline, he will not be covered with health insurance coverage from the market until the next open enrollment period.
The next enrollment period is from November 2014 to 15 January 2015. However, there are exceptions for qualifying life events such as moving to a new area that offers different plan options, change in household income that affects eligibility for tax credits, or changes in family size due to marriage or the birth of a child.
If a person is uninsured, he will be penalized only for the months without coverage. If a person is insured with a health policy at some point during the year and then also penalty is levied on him and paid, the amount of penalty will be withheld from his tax refund for 2014. If there is nonpayment, the IRS can withhold the amount from any future tax refunds, with an accrued interest of 3 percent per annum.
To encourage enrollment, the annual penalty will increase to $325 per adult and $162.50 per child, with a maximum of $975 per family or 2 percent of Annual Gross Income exceeding deductions and exemptions for the year 2015. Read more articles on daily rewards.
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