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DesideriScuri -> RE: Obamacare Tax Penalty (11/25/2013 6:44:21 AM)
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quote:
ORIGINAL: joether
The amount of 'totally ignorant morons' on here is amazing. Go to a library and READ THE DAMN BILL! Its been around for over three and a half years!
DesideriScuri,
I'm going to try to answer your question in the OP. Before I do that, I need you to consider a few things (call it a disclaimer):
A ) I remember asking this question way back in June of 2010 after I read the whole damn bill. VERY dry and dull read without pictures (sorry conservatives). And the document explains what happens with the penalty in a few different places. Just like with the 'grandfathered' clause I mentioned in another thread related to the ACA about which policies by insurances could remain in effect after the Jan 1, 2014 date. And it explains it in several different places in the 2400+ page document. There are no easy answers....
B ) The penalty comes in a few steps itself. For 2014 income tax form, its $95 or 1% of your gross income which ever is higher (if filing by yourself). For a family its another value all together (I think its around $392, but don't hold me to it). 2015 Income tax for single filer is $350 and the following years there after its $695 or 2.5% of your gross income.
C ) If your interested in the bill, you can find it HERE. Its 2409 pages long. But after you remove the front and back end of it, adjust the margins and single space the 'guts' its only about 680 pages long (rough estimate).
So you want to pay the $95 or 1% of your gross pay because you hate the President that much. The money is added on to your final charge after calculations (in theory, see below for why). That way if you have a big refund, the charge is deducted from your refund. If you end up paying, the IRS (in theory here again) will send a mailing to notify you of the charge and set up payment transaction. I think, the IRS may send along a document asking to verify your health insurance (in the event you actually forgot it when you paid your income tax form). The money itself first goes to the IRS and then onto the US Government before being sent (...I think...) to the group that handles the mechanics of the ACA: The Health and Human Services side of the US Government. They use the money to pay a number of elements found throughout the whole of the ACA. Its really to many to list here in any sane format....trust me!
An why is it done this way? I'm going with the idea that back in 2009 when the bill was drafted, the administration believed most people who would be subjected to the penalty would instead obtain healthcare coverage. While it cost more, the benefits lasted for the full year. So 'yes', the Administration figured most of those dealing with the decision for the penalty would take the wiser course of action. What the administration never predicted was the number of total idiots in the nation that would take the penalty to be spiteful at the President and Democrats (can you say 'childish'?). So the numbers within were based on the assumption there would not be a high percentage of individuals taking the penalty. I have no idea what the percentage is in the document off hand (its in the document). So the number paying the penalty will offset circumstances in a number of ways. What are those ways? I don't think I could exactly explain it right now without some hard numbers released.
What happens if you DONT pay the penalty? Well, the IRS has not exactly stated how it will define and carry out this mechanic just yet. However as history has shown us, the IRS is open to several different paths of leverage on you, the citizen. But before we get to those, the IRS would check to see if your the person filing meet anyone of the nine exemptions in the mandate. Yes, there are exemptions (do a Google search if your curious). If none of those exemptions apply, then:
1 ) The IRS simply tacks on the charge to your refund and thus, reduce it by the amount according to the ACA.
2 ) The IRS simply applies this charge to the following year's income tax amount and each year there after until its paid.
3 ) The IRS has charged filers an interest on unpaid taxes, and its likely this charge could meet the same circumstance.
4 ) The IRS can garnish your wages, or in the highly unlikely event of seizing your property to the amount needed to 'zero you out'.
In essence, you will be penalized for not holding a plan during the income tax document and the IRS is open to prosecution. HOWEVER, The ACA limits the IRS's ability to perform this in a direct manner. What that means exactly is anyone's guess right now.
While not a complete answer to your question, I hope this points you in the direction of the answer your looking for. You might just write to your representative to ask how the penalty charge is applied AFTER the IRS obtains it from you (in what ever way it does).
Joether, I'm going to respond to your post with constructive criticism. Please take it in the manner intended.
1) You presented a ridiculous amount of information, most of it, though, wasn't germane (or Tito, Michael, Janet, etc.). I put in red bold the only part that answered my question.
2) The tone of your posts is quite disappointing to me. You often provide a shitload of info, which I appreciate. However, making Conservatives out to be morons really diminishes you and your responses, in my eyes. I understand that how I think of you is likely of little consequence, but it's feedback.
3) Yeah, there isn't anything else. I just wanted there to be a third thing. [:D]
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