Obamacare Penalty Avoidance

There Are 19+ Ways to Avoid the Obamacare Tax Penalty. Which Exemption Will You Use

When you go to file your 2014 taxes, you’ll soon discover a new reporting requirement. You now have to tell the IRS whether or not you had health insurance in 2014. And if you didn’t have health insurance, you’re going to owe a tax penalty.

Depending on your income, this tax penalty could be well over $1,000.  Can you get it out of paying it? Well, yes… under certain circumstances you can. Fortunately, there are enough loopholes written into the law that most people will be able to avoid the Obamacare tax.

Almost none of the uninsured will end up paying the ObamaCare mandate penalty, according to an updated analysis by the Congressional Budget Office, which found that 87% will be able to claim an exemption.

That exemption rate is higher than the CBO had previously thought, which not only blows a hole in its budget forecast for the law, but also increases the odds of an insurance industry “death spiral.”

According to the CBO’s latest estimate, out of the 30 million people who will still be uninsured in 2016, just 4 million will end up paying any tax penalty, despite the law’s requirement that everyone buy government-approved insurance.

Obviously, it’s a good thing for you if you can avoid the tax penalty. You save money. But the more people who avoid the tax, the better. If nobody pays the penalty (or only a few people), then that could be the death knell for Obamacare.

So how do you get an exemption from paying the tax penalty? There are 19 different ways, plus a special “Hardship Exemption” category that provides an additional 14 exemptions.

For example, Christians can get an exemption if they participate in a medical bill-sharing ministry like Medi-Share. Even though medical bill-sharing is not technically health insurance, it provides similar benefits. So members of these services will not have to pay the tax penalty.

Here are a few of the other potential exemptions that could apply to a large number of people:

• You recently experienced the death of a close family member.
• You filed for bankruptcy in the last 6 months.
• You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt.
• Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.
• You experienced another hardship in obtaining health insurance.

Pay attention to that last exemption. It’s a general hardship exemption that could apply in many different circumstances. For example, you might qualify for the exemption if you applied for health insurance and were denied. Or you might qualify if you were accepted, but could not afford the premiums. And so on.

Since this is the first year that people are having to pay the Obamacare tax penalty, many tax preparers and CPAs will not be up to speed on all these exemptions. That’s why you must take matters into your own hands. Do the research yourself and do whatever you can to avoid the tax penalty. Hopefully this article will help you do that.

If you want to apply for a hardship exemption, you will need to make sure you check the correct box on your tax return and then submit this form. And if you’re interested, you can see a complete list of hardship exemptions here.

Hardship Exemption	Documentation Required
1. You were homeless.	None.
2. You were evicted in the past 6 months or were facing eviction or foreclosure.	Copy of eviction or foreclosure notice.
3. You received a shut-off notice from a utility company.	Copy of shut-off notice from utility company.
4. You recently experienced domestic violence.	None.
5. You recently experienced the death of a close family member.	Copy of death certificate, copy of death notice from newspaper, or copy of other official notice of death.
6. You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.	Copy of police or fire report, insurance claim, or other document from government agency, private entity, or news source documenting event.
7. You filed for bankruptcy in the last 6 months.	Copy of bankruptcy filing.
8. You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt.	Copies of medical bills.
9. You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.	Copies of receipts related to care.
10. You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don’t have the pay the penalty for the child.	Copy of medical support order AND copies of eligibility notices for Medicaid and CHIP showing that the child has been denied coverage.
11. As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace.	Copy of notice of appeals decision.
12. You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act.	Copy of notice of denial of eligibility for Medicaid.
13. Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.	Copy of cancellation notice.
14. You experienced another hardship in obtaining health insurance.	Please submit documentation if possible.

The last exemption could apply to you if you tried to get health insurance, but were denied for some reason. It might even apply if you could not find an affordable health insurance plan — regardless of whether your previous plan was cancelled or not (see #13).
Due to the number of exemptions available, it’s currently estimated that 87% of uninsured people will not have to pay the Obamacare tax.

Almost none of the uninsured will end up paying the ObamaCare mandate penalty, according to an updated analysis by the Congressional Budget Office, which found that 87% will be able to claim an exemption.

That exemption rate is higher than the CBO had previously thought, which not only blows a hole in its budget forecast for the law, but also increases the odds of an insurance industry “death spiral.”

According to the CBO’s latest estimate, out of the 30 million people who will still be uninsured in 2016, just 4 million will end up paying any tax penalty, despite the law’s requirement that everyone buy government-approved insurance.

Source:http://liberty247.net/health-insurance-2014-19-ways-avoid-obamacare-tax-penalty/

http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Exemptions