The Patient Protection and Affordable Care Act, more commonly known as Obamacare, imposes penalties on taxpayers who choose not to purchase qualifying health care coverage. These penalties were modest at first, but have been jumping up by large degrees. To make sure that you don’t get caught by surprise, consider the following summary of current penalties and how they are scheduled to progress in the near future:
In 2014, the first year that Obamacare penalties were in effect, they were relatively minor. The minimums were set at $95 per adult and $45.50 per child, capped at a total of $285. Higher income households could have a penalty as high as 1% of any income earned over the tax filing threshold.
The penalties increased for 2015. Currently, you can expect to pay $325 per adult and $162.50 per child, up to a limit of $975 or 2% of your household income above your tax filing threshold, whichever is higher.
Penalties are only going to get worse next year. Once 2016 rolls around, the rates will jump to $695 per adult and $347.50 per child, up to a limit of $2,085 or 2.5% of your household income above your filing threshold, whichever is higher. Following this, penalties shall go up by modest amounts according to the Consumer Price Index.
For more information on taxes, and how to avoid penalties, please consult Seattle CPA Alisa Na during normal business hours.