2010 brought us the iPhone 4, a first Super Bowl win for the Saints, and Lee DeWyze’s claim to fame on American Idol. And while these things promised a new hope, we’re more than happy to have moved on. The same goes for changes to Affordable Care Act (ACA), aka Obamacare, thanks to tax reform.
Say “No” to Paying Big Money for No Coverage
Tax reform through the Tax Cuts and Jobs Act of 2017 is flipping a major downside for many Americans – the big ol’ penalty for no health coverage.
Enacted by Congress in 2010, Obamacare required every American to have health coverage or an exemption due to low income or other factors. To no one’s surprise, not everyone could (or wanted to) meet this requirement due to the high cost of healthcare. As a result, the IRS reports 4 million Americans paid penalties for having no coverage in 2016, and at least 5.6 million paid the penalty for the 2015 tax year.
The penalties for 2017 and 2018 filings can amount up to $695 per individual or 2.5 percent of household income (up to $2,085). Moral of the story: Not paying for healthcare means you still have to pay something.
Looking Forward to a Penalty-free 2019
Tax reform promises millions of Americans a freedom from monstrous no-healthcare penalty fees, but don’t drop your provider quite yet. The changes won’t take effect until the 2019 tax year. Knowing the implications of The Act can help you calculate tax liability and plan for your year.
A tax professional like those at Tax Defense Network can guide you through how these changes could affect you, and what to do to avoid penalties in the future.