Janitor Bob Posted February 4, 2015 Report Share Posted February 4, 2015 57 year old client had insurance all year, but did not have any coverage during the year for her 41-year old dependent son. Household income is $30,227. Does a total penalty of $172 seem right? why was I thinking it would be this much EACH MONTH? Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 4, 2015 Report Share Posted February 4, 2015 57 year old client had insurance all year, but did not have any coverage during the year for her 41-year old dependent son. Household income is $30,227. Does a total penalty of $172 seem right? why was I thinking it would be this much EACH MONTH? Yes, looks correct for someone under 65 that is filing HOH. Penalty in this case is excess of household income 30227 over filing threshold of 13050 = 17177 * 1% = $172 penalty Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted February 4, 2015 Author Report Share Posted February 4, 2015 That is what I got from following the steps in detail...Just for some reason, I was thinking that this amount ($172 in this case) was the penalty EACH MONTH. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 4, 2015 Report Share Posted February 4, 2015 Nope, that's really for the whole year. 2015 will be higher. In those calcs, the 1% increase to 2%, and the flat dollar of $95 jumps up to $325 Quote Link to comment Share on other sites More sharing options...
easytax Posted February 4, 2015 Report Share Posted February 4, 2015 That is what I got from following the steps in detail...Just for some reason, I was thinking that this amount ($172 in this case) was the penalty EACH MONTH. You MUST be angling for a government job --- "for each month" -- since that seems to be how the government might look at things. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 4, 2015 Report Share Posted February 4, 2015 I thought the maximum penalty per person was $95 for 2014. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 4, 2015 Report Share Posted February 4, 2015 I thought the maximum penalty per person was $95 for 2014. I hope you are being sarcastic??? Max can be as much as $2K depending upon household income. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 4, 2015 Report Share Posted February 4, 2015 (edited) I honestly thought that if someone made less than 40K with 2 kids, the penaty would be $95 per head. So for a single person making less than 19k, the penalty will be $95 but for someone making $20,200 it will be $100? Edited February 4, 2015 by Pacun Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 4, 2015 Report Share Posted February 4, 2015 I honestly thought that if someone made less than 40K with 2 kids, the penaty would be $95 per head. So for a single person making less than 19k, the penalty will be $95 but for someone making $20,200 it will be $100? If you seriously believed that, you should get some training right now!!! Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 4, 2015 Report Share Posted February 4, 2015 If you seriously believed that, you should get some training right now!!! Jack, cut it out. These type of statements are not helping!!! We have tax preparers here with a lot of experience that are asking questions about the law, and now even asking for help with how to fill out the forms and worksheets, and some of those answers are found right in the instructions to these new forms. We need to help each other, not beat each other up. 3 Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 4, 2015 Report Share Posted February 4, 2015 While determining the penalty amount, you should also look at the possibility of an affordability exemption if the amount of the insurance premium for the year would be more than 8% of the MAGI. You have to do this for your geographical area. In your original post you put the household income at 30,227 x 8% equals 2418.16. The lowest level bronze plan may exceed the 8% figure per year. Remember that determining the insurance cost is MAGI based as well. Also, if these folks would possibly qualify for a subsidy, you might want to advise them of that as well. There is an earlier post that has a link where you can input the information for your geographical area and it will calculate the premiums with subsidy for you. I have used it and it is accurate. Confusing I know, but another area to look at to help your client. Quote Link to comment Share on other sites More sharing options...
rfassett Posted February 4, 2015 Report Share Posted February 4, 2015 There has been so much mis-information floating around about these things. I can honestly state, that for awhile, I was also under the impression, like Pacun, that the maximum penalty was $95 per person. Then I heard it was $95 per month per person. Then I heard that there was a !% issue. I believe I do now truly do have a handle on the rules. I have been through a couple of returns with varying issues and have had to walk through the worksheets next to the rules. I am starting to get it. It is for the reasons exemplified here that I rarely talk much (out loud) about these things until I have the opportunity to put a pencil to the paper. Why? At the risk of repeating myself , because there is an overabundance of mis-information out there. By the end of the next 30 days, we will ALL be experts on this - but we all need to exercise patience with our fellow practitioners until everyone gets up to speed. 3 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 4, 2015 Report Share Posted February 4, 2015 That is why I chose to be proactive and learn it BEFORE tax season. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 4, 2015 Report Share Posted February 4, 2015 That is why I chose to be proactive and learn it BEFORE tax season. We are ALL still finding and learning intracasies of the ACA as we go along, and we are just now working with the forms and the worksheets to put it all together. No one here knows it ALL, not even you, Jack, and we all make mistakes from time to time too, so I'll ask you again to please stop with these type of comments. If you don't like my statement or think it doesn't apply to you, I'll gladly recall and review our "discussion" from last month about sec 5000A where you demanded that I find the definition of MAGI as it relates to the shared responsibility payment, which I did do by the way, or more recently where you and I were both wrong about the short coverage gap being "less than 3 months" and not "3 months or less" where you asked Pacun for a cite to prove that to you. No one posting here should be embarrassed, demeaned, or belittled for asking a question or making an incorrect assumption or statement. 2 Quote Link to comment Share on other sites More sharing options...
rfassett Posted February 5, 2015 Report Share Posted February 5, 2015 That is why I chose to be proactive and learn it BEFORE tax season. But the fact of the matter, just like with the Form 3115 issue, the rules were, and in some cases, still are developing. So just like you, I was proactive and learning as much as I could before tax season, as I am sure most all of us here did. Some of us did CPE that just was out and out wrong. Some of us took multiple CPE's that conflicted. This whole thing is still in process of being developed. If the majority of the returns are prepared correctly this year, I will count that a minor miracle. 3 Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 5, 2015 Report Share Posted February 5, 2015 Amen to rfassett's comments. I too was proactive with learning as much as I could about the ACA before tax season and some of those classes had conflicting information. One of them even calculated the penalty one way in the material and a different way on the quiz. So, once I thought I felt comfortable with what I learned, I quickly found out that I still needed to learn more after I started preparing returns this season. As I said earlier, none of the courses that I took used the subsidy to figure the affordability as far as I can remember. Just learned that two days ago. All of this still makes me nervous and I take time over each return and am still apprehensive as to whether they are prepared right or not. 3 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.