Penalty for not having health insurance in 2015: You must have minimum essential coverage for health insurance or pay a tax penalty. If you have employer sponsored health insurance, an individual plan you purchase yourself, or insurance through a government program (Medicaid or Medicare), you don’t need to purchase other health insurance. However, insurance only cover vision or dental care, worker’s compensation, coverage for specific diseases or condition or discount plan my not meet the requirements. If you don’t have health insurance in 2015, you will need to pay the penalty on your 2015 tax return (due on 4/15/16). The penalty increase to 2% of your annual 2015 household income or $325 per adult and $162.50 per Child (up to $975 for a family), which is higher. You pay penalty for yourself, your spouse and each of your dependents. The penalty for 2016 will increase.
Health Insurance Premium Tax Credit: If individuals or families purchase health insurance through the Health Insurance Marketplace, they may qualify for the new Health Insurance Premium Tax Credit. To qualify for the credit, your household income must fall between 100 percent and 400 percent of the federal poverty line, you may not be claimed as a dependent on any other taxpayer’s return, and (if married), you must file jointly. In the case of spousal abuse or abandonment, this requirement may be waived.
The ACA Changes for All Individuals: Medical and Dental Expenses: Beginning January 1, 2013, you can deduct only the part of your medical and dental expenses that exceed 10% of your adjusted gross income (remain the same -7.5% if either you or your spouse was born before January 2, 1951).
The ACA Changes for High-Income Households
Additional Medicare Tax on Wages and Compensation: For tax years beginning after December 31, 2012, if you earn more than $200,000 /Single, Head of household and qualifying widow(er) with qualifying person, $250,000 if Married filing Jointly or $125,000 if you Married filing seperate in wages, compensation, and self-employment income, a 0.9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act compensation, and self-employment income over a threshold amount based on your filing status. You may need to include this amount when figuring your estimated tax.
Net Investment Income Tax (NIIT). For tax years beginning after December 31, 2012, you may be subject to Net Investment Income Tax (NIIT), if your modified adjusted gross income is $200,000 or more ($250,000 if filing jointly, or $125,000 if married filing separately) . NIIT is a 3.8% tax on the lesser of net investment income or the excess of your modified adjusted gross income (MAGI) over the threshold amount. NIIT include incomes from interest, dividends, capital gains, rental and royalty income, and certain other investment income and reduce your investment expenses. Nonresident alien are not subject to the additional 3.8% tax.