Individuals who do not have health insurance face many financial penalties in addition to the health risks they face when they do not have access to medical care. One of these financial penalties includes the federal government’s penalty imposed on taxpayers without insurance at tax time. Unfortunately, while this penalty started out relatively small in 2014, at $95 or 1 percent of taxable income, whichever was greater, that figure is set to jump much higher in 2016.
5 Tips for Taxpayers About Penalties Relating to Health Insurance
What do taxpayers need to know about tax problems relating to not having health insurance? Here are five things you should be aware of:
- A penalty is imposed at tax time for those without health insurance.
- The sign-up season for obtaining health insurance through the federal government in the year 2016 begins on November 1st and runs through January 31st.
- In 2016, the penalty for not having health insurance will increase significantly.
- For 2015, the penalty is $325 or 2 percent of a person’s taxable income, whichever amount is greater.
- In 2016, the penalty will increase to $695, or 2.5 percent of a person’s taxable income, whichever amount is greater.
Penalties for lack of health insurance are not limited to a small number of taxpayers. The IRS estimates that 7.5 million households paid the penalty in 2015. These penalties amounted to approximately $1.5 billion. Despite the scheduled increase in the fine for 2016, many families may still resist signing up during this enrollment season because their household budgets may already be stretched too thin to be able to afford the monthly premiums.
Dealing with potential tax problems is a stressful experience for most taxpayers. The good news that we can help you find a solution so that you can move on with your life and put your tax problems in the past. Learn more about the experiences of our previous clients by checking out our client testimonials today.