You Must Have Insurance . . . or else Pay a Tax

The Supreme Court refashioned the individual mandate as a tax for 2014.

 

Insurance or Tax?

The individual mandate tax is unprecedented. As written, PPACA (healthcare reform legislation) established an individual mandate to buy health insurance and a penalty for not doing so. This was the first time in American History that the federal government ordered the general population to purchase a commercial product. Responding to the lawsuits by NFIB and 26 states, the Supreme Court refashioned the mandate and penalty into a choice between two options: Buy Insurance or Pay a Tax for Failing to do so!

 

Individual mandate taxes begin in 2014 and rise thereafter.

 

Tax Calculations:

Taxes begin in 2014 and rise in years following. In each year, the tax consists of the higher of a dollar amount or a percentage of household income. For a given household, the tax applies to each individual, up to a maximum of three. Following is the schedule of taxes:

• 2014: The higher of $95 per person (up to 3 people, or $285) OR 1.0% of taxable income.

• 2015: The higher of $325 per person (up to 3 people, or $975) OR 2.0% of taxable income.

• 2016: The higher of $695 per person (up to 3 people, or $2,085) OR 2.5% of taxable income.

• After 2016: The same as 2016, but adjusted annually for cost-of-living increases.

 

If you are without any health insurance today and want to know what your options are before you get taxed in 2014, contact Triten Insurance & Financial Services, Inc. at 423-279-9060.

You do have other options for purchasing health coverage verses paying a tax for nothing!