Suppose you're one of the millions of Americans who do not have health insurance through your employer for whom it makes much more financial sense to pay the Obamacare tax than it does to buy health insurance. To avoid getting hit with a larger tax bill than you might otherwise expect when you file your taxes for 2014, how much extra should you have withheld from each of your paychecks today?
Our latest tool will help you answer this critical question, because the IRS' withholding tables for 2014 do not take the Affordable Care Act's income tax increase for 2014 into account.
Just enter the indicated data in our tool, and we'll do the math that will apply for you for the 2014 tax year (it will not apply for 2015 or any year afterward).
In the tool above, we assume that you haven't had any extra amount withheld from your paycheck to pay for the Obamacare income tax for 2014, and will need to do so over your remaining paychecks for the year. We also assume that you will be filing as a Single individual for the year, have no dependents to claim on your income taxes and that you are not eligible for Medicaid.
Depending upon how expensive health insurance is in your region, you may be exempt from the tax if the annual cost of the premiums for a "Bronze"-level plan exceeded 8% of your annual household income, so you'll want to confirm if that's the case for you.
These are important considerations because even though the IRS has not been given explicit directions to punish taxpayers who might underwithhold their income taxes by the amount of their Obamacare tax, you will still owe the money. The IRS is busy proving that it will come after you, or your children, to collect it, decades after the agency decides that they "loaned" you the amount you may have underwithheld. No matter how small it is, with interest and penalties.
Update: The IRS backs down on collecting "debts" owed to Social Security that are more than 10 years old. Still, if you're going to be on the hook for Obamacare taxes this year, and your regular paycheck withholding doesn't account for it, look for the IRS to take the money you owe for Obamacare from your refund next year.
And remember, even though paying the tax is frequently much more affordable than Affordable Care Act health insurance, there are better and cheaper options available to you. If you want more affordable options and to avoid having to pay Obamacare's doubled income tax rates for the 2015 tax year, now is a good time to get familiar with those options.
Have a happy tax day!
Labels: personal finance, taxes, tool
Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:
ironman at politicalcalculations
Thanks in advance!
Closing values for previous trading day.
This site is primarily powered by:
CSS Validation
RSS Site Feed
JavaScript
The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.
Other Cool Resources
Blog Roll
