Thursday, June 28, 2012

IF the Individual Mandate is upheld, here is a chart showing the Tax (or "fee") you will pay for not being insured...

If by some unexpected circumstance the Individual Mandate is declared Constitutional by the Supreme Court today, the chart below shows how the tax (or "Fee", I think it is actually called in the ACA bill) will play out for you.

Source: HERE
Example: If "1 Adult" in 2014 decided not to buy their own health insurance they would have to pay 1% of their Adjusted Gross Income (AGI--- your income that is taxed AFTER you take deductions from your actual ("Gross") income you earned in 2014).

Let's say for 2014 you calculate your AGI to be $15,000 (your gross income would actually be, perhaps, $17,000). One percent of $15,000 would be $150. That is higher than $95 (the minimum) so $150 would be your tax for forgoing the purchase of health insurance.  This is in ADDITION to any other Federal Income tax you may owe.

Notice in 2016 that percentage increases to 2.5%. Assume your income stays the same, then your tax would be 2.5% X $15,000 = $375. However, the minimum in 2016 is $695 so that is what you would pay instead of the $375.

It the purchase of insurance cost you more than the tax (or "Fee) then you are better off just paying the tax. It will be cheaper for you.
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